Ceiling for small loans under credit guarantee scheme widened

Bangladesh Bank has widened the limit of loans under the credit guarantee scheme (CGS) for cottage, micro, small and medium enterprises (CMSMEs).

The limit of credit or investment has now been fixed at Tk 25,000 to Tk 1 crore, up from Tk 2 lakh to Tk 50 lakh previously.

According to a BB notice issued today, the central bank has come up with the decision to ensure 100 per cent implementation of the stimulus package to the tune of Tk 20,000 crore for CMSMEs.

The central bank drew up the scheme on July 23 last year as banks consistently showed reluctance to give out loans to CMSMEs under the scheme.

Lenders collectively will be allowed to avail 30 per cent of their total distributed loans from the scheme, worth Tk 2,000 crore. The banks will get the funds from the CGS as compensation against the default loans under the stimulus package.

The latest revision of the scheme would encourage lenders to speed up loan disbursement to CMSMEs, a BB official said.