Small firms get less from second round of stimulus
Skip to main content
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
  • Epaper
  • More
    • Subscribe
    • COVID-19
    • Bangladesh
    • Splash
    • Videos
    • Games
    • Long Read
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
The Business Standard

Tuesday
July 05, 2022

Sign In
Subscribe
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
  • Epaper
  • More
    • Subscribe
    • COVID-19
    • Bangladesh
    • Splash
    • Videos
    • Games
    • Long Read
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
TUESDAY, JULY 05, 2022
Small firms get less from second round of stimulus

Industry

Sakhawat Prince
23 May, 2022, 12:30 pm
Last modified: 23 May, 2022, 08:38 pm

Related News

  • CMSME loan disbursement drops 10% in March quarter
  • BB recognises Krishi Bank for target disbursement of agri-loans
  • BB recognises AB Bank for target disbursement of agri-loans
  • 25% of govt procurement must come from CMSMEs
  • CMSMEs have much better repayment records than big borrowers. Then why don’t banks lend to them?

Small firms get less from second round of stimulus

Sakhawat Prince
23 May, 2022, 12:30 pm
Last modified: 23 May, 2022, 08:38 pm

Less than half of small businesses have benefited from the second round of stimulus packages, announced by the government to steer the economy from the pandemic shocks, while the loans have been fully disbursed among large companies.

In the second round during the current financial year, the target for stimulus loans for the Cottage, Micro, Small and Medium Enterprise (CMSME) industries was set at Tk20,000 crore. However, loans disbursed during the July-March period of this fiscal year were only 45.71%, or Tk9,120 crore. Although, 76.93% of the first round of stimulus loans were disbursed.

In addition, the government has launched a Tk2,000 crore credit guarantee scheme for the cottage, micro, and small (CMS) entrepreneurs under the CMSME package. However, under this scheme, a guarantee facility of only Tk89.27 crore has been given in about ten months.

For big business, back-to-back loans – known as export development fund (EDF) –  are offered at 2% interest to increase the scope of importing raw materials. Tk29,750 crore was announced for the current financial year. In the meantime, Tk27,757 crore of this incentive loan has been disbursed, about 93.30% of the target.

On the slow pace of the CMSME loans, Fahmida Khatun, executive director of the Center for Policy Dialogue (CPD), said small businesses did not get the same amount of benefits as large companies since the announcement of stimulus loans.

"In the case of small entrepreneurs, due to various obligations to fulfil bank formalities, small entrepreneurs have received comparatively fewer loans. As a result, it will be difficult for these small entrepreneurs to recover their businesses," she added.

However, due to the sluggish pace of CMSME lending, the central bank governor at a meeting with the heads of all banks last December stressed the importance of disbursement of the loans. Although banks have been asked to give importance to this issue, they have not changed the picture of loan disbursement.

So far, the government has announced a total of 28 packages to address the Covid-19 damages. In all, the amount of these packages is more than Tk1.87 lakh crore

Of working capital incentive loans for affected industrial service sector companies, only Tk11,322 crore has been disbursed in the first ten months of the current financial year, which is 34.30% of the target.

In the last financial year, a stimulus package of Tk40,000 crore was announced in this sector. In the current financial year, the target of this loan has been set at Tk33,000 crore. A total of 1,162 industries have availed the benefits during the current period.

The total loan disbursed since the inception of this package is Tk44.25 crore. And the total number of beneficiaries is 4,468 industrial establishments. At the consumer level, the interest rate is 4.50%. The government interest subsidy is 4.50%.

Asked about the sluggish pace of CMSME stimulus loans, Sirajul Islam, executive director and spokesperson of the central bank, said large loans are always high because they can be disbursed to a few institutions but lending to small entrepreneurs requires a lot of time.

However, since the governor has instructed the managing directors of all the banks to increase the CMSME loans, he hoped that the target will be met in the next two and a half months. If anyone fails, they will be fined.

Bankers say the demand for stimulus loans is much lower now. However, companies applying for the loan are also getting fewer disbursements. This is because the ministry is now releasing less for the subsidy than earlier.

Economy / Top News

CMSME / Cottage, Micro, Small and Medium Enterprise (CMSME) / CMS entrepreneurs / CMSME loan disbursement target / CMSME sector / CMSMEs / Stimulus Aid Package / stimulus loans / stimulus fund

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Padma Bridge opens up investment spree in south
    Padma Bridge opens up investment spree in south
  • Several law enforcement departments monitor the scene of a mass shooting at a Fourth of July parade route in the wealthy Chicago suburb of Highland Park, Illinois, US July 4, 2022. REUTERS/Max Herman
    Suspect captured in shooting at 4 July parade in Chicago's Highland Park suburb
  • Photo: Collected
    Blackouts return as Bangladesh feels first stirrings of energy crisis

MOST VIEWED

  • Padma Bridge opens up investment spree in south
    Padma Bridge opens up investment spree in south
  • Govt to ask for protein import details for poultry feed to check its surging price
    Govt to ask for protein import details for poultry feed to check its surging price
  • Workers' wages, bonuses must be paid by 7 July: State minister 
    Workers' wages, bonuses must be paid by 7 July: State minister 
  • Terry towel: A soft start later to grow into a billion dollar industry
    Terry towel: A soft start later to grow into a billion dollar industry
  • Non-compliant tanners fear losing Eid business
    Non-compliant tanners fear losing Eid business
  • (In the middle standing) Reduanul Aziz, Head of Business Operation, Spark Infrastructure; Farid Ahmed Bhuiya, Managing Director, RP Construction;  Dr. Tejkera Khanam, Chairman, RP Construction; Tanazzul Ayman, Chairman, Spark Infrastructure and Md Moinuddin Sifty, Managing Director, Spark Infrastructure. Photo: Courtesy
    Opple launches its operation in Bangladesh

Related News

  • CMSME loan disbursement drops 10% in March quarter
  • BB recognises Krishi Bank for target disbursement of agri-loans
  • BB recognises AB Bank for target disbursement of agri-loans
  • 25% of govt procurement must come from CMSMEs
  • CMSMEs have much better repayment records than big borrowers. Then why don’t banks lend to them?

Features

Last month Swapan Kumar Biswas, the acting principal of Mirzapur United College, was forced to wear a garland of shoes for ‘hurting religious sentiments.’ Photo: Collected

Where do teachers rank in our society?

21h | Panorama
Japanese Ambassador Naoki Ito. Sketch: TBS

'The game-changing projects are in line with the Bay of Bengal Industrial Growth Belt initiative'

23h | Panorama
A Glittery Eid

A Glittery Eid

1d | Mode
Rise’s target customers are people who crave to express themselves through what they wear, and their clothing line is not relegated to any age range.

Level up your Eid game with Rise

1d | Mode

More Videos from TBS

Realme Narzo 50A Prime available now

Realme Narzo 50A Prime available now

11h | Videos
Export products to get diversified

Export products to get diversified

13h | Videos
Horrible routes of human trafficking

Horrible routes of human trafficking

13h | Videos
Why Mbappe cheated Real Madrid

Why Mbappe cheated Real Madrid

14h | Videos

Most Read

1
TBS Illustration
Education

Universities may launch online classes again after Eid

2
Meet the man behind 'Azke amar mon balo nei'
Splash

Meet the man behind 'Azke amar mon balo nei'

3
Padma Bridge from satellite. Photo: Screengrab
Bangladesh

Padma Bridge from satellite 

4
World Bank to give Bangladesh $18b IDA loans in next five years
Economy

World Bank to give Bangladesh $18b IDA loans in next five years

5
Illustration: TBS
Interviews

‘No Bangladeshi company has the business model for exporting agricultural product’

6
Lee Hyun-seung (third from right), head of Korea Expressway Corp.'s Overseas Project Division, shakes hands with Quazi Muhammad Ferdous, head of the Bridge Authority of Bangladesh, after signing a contract on June 29 (local time).
Bangladesh

Korean company to oversee N8 Expressway in Bangladesh

EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2022
The Business Standard All rights reserved
Technical Partner: RSI Lab
BENEATH THE SURFACE
Workers ready a passenger vessel with a fresh coat of paint to the deck ahead of the Eid-ul-Azha at a dockyard at Mirerbagh in South Keraniganj. The vessel getting the makeover plies the Bhandaria route and will take holidaying people from the city to their country homes. Eid will be celebrated on 10 June this year. The photo was taken on Monday. Photo: Mumit M

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net