Bangladesh Bank (BB) is receiving encouraging response both from financial institutions and donors to its small business refinancing fund introduced to offer small entrepreneurs easy access to loans.

The central bank's revelation delighted the SME (small and medium enterprise) sector as the country's micro entrepreneurs gather in Dhaka from today to take part in the 'SME Fair 2005'. Prime Minister Khaleda Zia will inaugurate the I2-day exhibition at Bangladesh-China Friendship ConferenceCentre.

BB disbursedTklOl crore among commercial banks and financial institutions from its small business refinancing fund during June 200-1 to February 2005. Apart from the central bank'sTklOOcrorecontribu-tion, the World Bank extended $10 million to the fund.

"The refinancing fund has generated immense interest among financial institutions and donors. The Asian Development Bank will extend $30 million to the fund soon," BB Governor Fakhruddin Ahmed told reporters at his office in Dhaka yesterday.

BB first offered the refinancing fund to financial institutions at bank rate, later SME entrepreneurs availed the fund from the financial institutions. The entrepreneurs can draw a minimum of Tk2 lakh to rnaximumTk50lakh, he said.

As per BB guidelines, the financial institutions must ensure 90 percent recovery of the disbursed fund to avail the refinancing fund. Inspiring responses in the last eight months gave strong signal to commercial banks to initiate their own

SME financing schemes, the governor said.

"BB introduced the refinancing fund to work as eye-opener for commercial banks and other financial Institutions to increase financing to SMEs which contribute significantly to the national economy by creating jobs, diversifying export basket and reducing poverty," he said.

"If commercial banks do not launch SME credit schemes, the BB refinancing initiatives may not sustain for long," the governor warned.

The SME financing would diversify loan portfolio of commercial banks and also reduce risk, he said.

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) is organising the second edition of the SME fair to promote SMEs and attract foreign and local buyers and investors in thissector.

The FBCCI in cooperation with the Standard Chartered Bank will award the seven best small and medium scale enterprises this year for their contribution to the development of the SME sector.

The categories that will be chosen for the award are innovative entrepreneur (product), best enterprise in terms of management, standard and production system, best woman entrepreneur, best medium joint and corporate industry, best medium corporate management, outstanding corporate woman entrepreneur and best SME facilitator.

There will be around 170 stalls and 16 pavilions displaying different products at the fair. The general public can visit the fair from 10am to 9pm until April 15 at an entry fee ofTklO.