Speakers at a workshop today stressed the need for ensuring speedy disbursement of stimulus to the stakeholders of the Cottage Micro Small and Medium Entrepreneurs (CMSMEs).
They said the lack of required documents, complicated loan disbursement process, absence of bank account, poor relation between banks and entrepreneurs, collateral issues, lack of consistency and coherence of documents and coordination among the entrepreneurs and financial institutions are some of the bottlenecks that hinder faster disbursement of stimulus to the CMSMEs.
They made the observations at a workshop on “Procedures and preparedness of getting loan from stimulus package from banks” organized by the Dhaka Chamber of Commerce & Industry (DCCI) today.
Jaker Hossain, General Manager (SMESPD), Bangladesh Bank was present as the guest of honour at the workshop.
DCCI President Rizwan Rahman in his welcome remarks said 80 percent of total employment in the industry sector comes from CMSMEs contributing about 45 percent value addition in the manufacturing sector. But, due to lack of financial and policy support, the CMSME sector could not utilize their fullest capacity and potentials.
In order to help the harmed CMSMEs in the pandemic and to revive the economy, government has declared a stimulus package of Taka 40,000 crore only for the CMSME sector in two phases. But, due to complex definition of CMSME, they have been facing difficulties in getting loans from the banks.
He however, urged to make easy and faster the implementation of loan disbursement process for the revival of CMSMEs.
Md. Jaker Hossain, General Manager (SMESPD), Bangladesh Bank said that the disbursement of loan under stimulus is quite satisfactory in the city areas, but in remote areas it is not up to the mark.
He informed that from the first phase of stimulus of Taka 20,000 crore, Taka 15,500 crore has already been disbursed and from the 2nd phase of Taka 20,000 crore, Taka 6,217 crore has been disbursed as of 9 February, 2022 which is 31 percent of the allotment in 2nd phase.
Jaker said in the field level, there might have some misconceptions among the bankers and entrepreneurs that hinder slow disbursement process.
He also requested the loan seekers to maintain proper documents and cooperate with banks to get loan in a faster manner.
Md. Rafiqul Islam, Executive Vice President of the Islami Bank Bangladesh Ltd. in his keynote paper said that a SME database is very much essential for distributing loans. CMSMEs represent 90 percent of businesses.
As per the guidelines of Bangladesh Bank, he said 30 percent of loans of banks and financial institutions dedicated to MSMEs having an easy sanction process, he added.
He also said that a banker has to follow almost 86 rules and regulations in the day to day banking activities. He said for a CMSME loan a minimum set of documents are needed as banks have to comply with financial transparency. Therefore he requested loan seekers to maintain consistency and coherence of submitted documents.
In this regard, Rafiqul Islam said digitalization of all services will help the process a lot. Banks are ready and willing to disburse loans, but the numbers of proposals are not very remarkable.
DCCI Senior Vice President Arman Haque moderated the question answer session. More than a 100 CMSME members of DCCI participated in the virtual workshop for better understanding on how to avail loans under stimulus easily.