Loan disbursements to the cottage, micro, small, and medium enterprises (CMSMEs) have declined by Tk5,401 crore or 9.45% in the January-March quarter although the country's banking sector registered an increase in their lending volumes.
In three months through March this year, banks and financial institutions disbursed loans amounting to Tk51,716.89 crore among more than 289,000 entrepreneurs. In the previous quarter, the banking sector distributed Tk57,118 crore among more than 295,000 entrepreneurs.
Industry insiders say small businesses have suffered the most during the Covid-19 pandemic, but they are getting fewer loans. Lenders tend to disburse loans to large borrowers while small entrepreneurs suffer due to various complications in getting loans from banks.
Meanwhile, the Bangladesh Bank data says that in the March quarter of 2021, loans worth Tk44,445 crore were distributed among 228,327 entrepreneurs. In other words, the loan disbursement has increased by Tk7,271 crore compared to the January-March quarter last year.
Ebadat, an SME entrepreneur, told TBS that he has a hardware business at the best place in his upazila town of Borhanuddin in Bhola.
"Our products have a huge demand among buyers. But our business is not going well for three months as there are fewer products. In the last three months, I went to a private bank for a loan of Tk30 lakh around one hundred times. But its head office has asked for various papers more than ten times on various pretexts," he added.
Meanwhile, banks have fully disbursed the benefits to big businessmen from the government's stimulus package announced to revive the country's Covid-hit economy but lag far behind the target in disbursing loans to small entrepreneurs.
In the second phase of the current financial year, the stimulus loan target for CMSME industries has been set at Tk20,000 crore. Banks have disbursed Tk9,120 crore or 45.71% of the loans during the July-March period.
In addition, the authorities launched a Tk2,000 crore credit guarantee scheme for entrepreneurs in the cottage, micro, and small (CMS) sector under the CMSME package. However, a guarantee facility of Tk89.27 crore has been disbursed in about ten months under this scheme.
A senior official of the central bank said that all banks have been instructed to increase the loan disbursement in the CMSME sector, but the loan disbursement is not increasing. This is because many entrepreneurs feel that they do not have to repay the loans that the banks have given to them in the past.
Therefore, bankers are showing less interest in disbursing loans to the CMSME sector. Banks can easily lend to big businesses but they have to reach a large number of CMSME entrepreneurs to disburse just Tk100 crore, he added.
Data analysis shows that in January this year, loans worth Tk4,018 crore were disbursed to 56,074 new entrepreneurs in the SME sector. Besides, it has given Tk9346 crore of loans to 112,770 entrepreneurs without any collateral.
Industrial loan disbursement registered 33.75% growth in the January-March quarter of the current fiscal year compared to the corresponding period last year, according to data released by the central bank on Wednesday.
According to the data, the country's industrial sector borrowed Tk127,671 crore in the January-March period, while the bank borrowing was Tk90,966 crore in the same quarter last year marked by Covid-led business slowdown.
As banks lent Tk124,865 crore to the industries in the October-December quarter last year, January-March industrial loan disbursement rose by Tk2,806 crore compared to the previous quarter.