Tk 1,100 cr seed money sought for small entrepreneurs
May 06, 2020, 06:25 PM
by UNB NEWS
Publish- May 06, 2020, 06:25 PM
Update- May 06, 2020, 08:40 PM
The Ministry of Industries has sought Tk 1,100 crore as seed money for the small entrepreneurs who remain outside the banking system and cannot avail of fund from the stimulus package announced for the SME sector to overcome the impacts of coronavirus pandemic.
With Tk 1,100 crore seed money, the Small & Medium Enterprise (SME) Foundation will implement a Tk 500-crore loan progamme, while Bangladesh Small and Cottage Industries Corporation (BSCIC) execute a Tk 600-crore loan programme for small entrepreneurs.
The Industries Ministry on April 30 last sent a letter to the Finance Ministry seeking the Tk 1,100 crore as seed money considering that small enterprises and cottage industries are being affected badly due to the outbreak of COVID-19, said a press release on Wednesday.
In the letter, it is mentioned that the Prime Minister on April 5 announced a Tk 20,000-crore stimulus package for the SME sector and then the Bangladesh Bank issued a circular on April 13 to disburse the stimulus package.
According to the circular, commercial banks will run their loan programmes on the basis of bank-client relationship while old clients will get priority, says the letter.
Now some 15 percent entrepreneurs in the small and cottage industries are currently running businesses with loans from banks, while the remaining 85 percent are not involved in taking formal loans and they are also not accustomed to maintaining formal accounts.
According to a survey conducted by Bangladesh Bureau of Statistics (BBS) in 2019, out of the 46,291 manufacturing units in the country, 87 percent are small and cottage industries.