Bangladesh Bank has introduced a new credit guarantee facility to speed up loan disbursement to landless farmers, low income professionals, school banking account holders and small traders.
The SME & Special Programmes Department of BB issued a circular on Sunday titled "Financial Services Credit Guarantee Scheme" in imitation of the existing Credit Guarantee Unit (CGU) unit to ensure repayment of loans under the Financial Inclusion Department (FID) circular.
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The marginal people can take a loan of Tk 25000 to Tk 5 lakh in a single name while Tk 20 lakh can be borrowed as a 5 member group under the new credit guarantee scheme.
Earlier, the central bank constructed a fund of Tk 500 crore from its own source for providing credit guarantee scheme to accelerate loan disbursement to the informal sector.
But the loan disbursement in this sector is not satisfactory despite enforcement of Bangladesh Bank. In order to vibrant rural economy, the central bank introduced the ‘Financial Services Credit Guarantee Scheme’ against the loans for marginal people.
The BB stated that the adverse effects of the second wave of Covid-19 are hampering the recovery of the economy. In this context, the existing refinancing scheme for marginal / landless farmers, low-income professionals and small traders.
Under the restructured, no security deposit can be taken in case of lending to marginal / landless farmers, low mother professionals, school banking account holders and small traders with accounts of Tk10/50/100, the circular said.
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On the other hand, lending banks can take personal guarantee from not more than two persons including the borrower to provide loan.
The lending bank will take advantage of the credit guarantee scheme against the loan payable / disbursed under the scheme. In this case, the BB will provide credit guarantee support to the banks.
The lending banks have to sign a participatory agreement with the Bangladesh Bank to avail the credit guarantee facility.