Prime Bank PLC and SME Foundation have entered into a refinancing agreement to boost credit accessibility for cottage, micro, small, and medium enterprises (CMSMEs). This partnership aligns with the government’s Tk 300 crore revolving fund and adheres to credit wholesaling guidelines aimed at fostering economic growth at the grassroots level.
The agreement was signed recently in Dhaka by M Nazeem A Choudhury, additional managing director of Prime Bank PLC, and Anwar Hossain Chowdhury, managing director of SME Foundation. They highlighted that this collaboration will not only generate employment opportunities but also enhance the overall resilience of the CMSME sector in Bangladesh.
During the program, Khandakar Abdul Muktadir, minister for industries, commerce, textiles, and jute, commended the government’s dedication to creating a favorable business environment for small-scale entrepreneurs.
Prime Bank will offer cost-effective loans to eligible entrepreneurs under the agreement, with a maximum interest rate of 8 percent per annum. The funding ranges from Tk 1 lakh to Tk 25 lakh, tailored to the enterprise’s requirements. The repayment terms are flexible, extending up to four years, including a six-month grace period to ensure businesses have time to establish revenue streams before commencing monthly repayments.
The initiative places a strong emphasis on financial inclusion and social equity, mandating a significant portion of funds to be directed towards women entrepreneurs and businesses in specific industrial clusters. It also gives priority to young ICT innovators, manufacturers of import-substituting products, and entrepreneurs in climate-vulnerable or disadvantaged regions.
By waiving the need for formal collateral for loans up to Tk 10 lakh, the partnership aims to assist entrepreneurs with limited assets in securing capital for business growth. Both SME Foundation and Prime Bank are optimistic about the fund’s impact on the national economy, focusing not only on lending but also on promoting sustainable industrialization through green technologies and aiding returning migrants in reintegrating into the workforce.
