STAR BUSINESS REPORT

The Bangladesh Bank has rolled out two refinance schemes worth a combined Tk 8,000 crore to ease financing constraints on businesses, stimulate investment, generate employment and reduce the country’s heavy dependence on the readymade garment (RMG) sector for export earnings.

In separate circulars issued on June 7 and June 8, the central bank announced a Tk 5,000 crore revolving “Working Capital Refinancing Fund for the CMSME Sector” and a Tk 3,000 crore “Export Diversification Refinance Scheme”.

Both funds will be drawn from the surplus liquidity of scheduled banks and managed by the BB.

Under both schemes, participating banks may obtain refinancing funds from the central bank at 4 percent interest. Banks will then be permitted to lend to customers at a maximum of 9 percent under the CMSME fund and 7 percent under the export diversification scheme.

Borrowers will be entitled to a grace period of three to six months depending on the nature of the loan or investment.

The move comes as businesses, particularly small and medium enterprises, continue to struggle with high borrowing costs, liquidity shortages and weak demand, while policymakers seek to broaden the country’s export base amid growing global competition.

CMSME SCHEME

Cottage, micro, small and medium enterprises (CMSMEs) remain a key driver of Bangladesh’s economy through job creation, support for local industries and production of import-substituting goods. Yet many such enterprises struggle to secure adequate working capital, preventing them from operating at full capacity.

The Tk 5,000 crore revolving fund, operational for three years, will cover working capital loans and investments extended to CMSMEs that cannot run at full capacity due to working capital shortages. Renewed working-capital facilities will also qualify.

However, borrowers classified as defaulters in the Credit Information Bureau (CIB) database will not be eligible.

BB, in its circular, said the objective of the fund is to help businesses increase production capacity, strengthen economic activity and create both direct and indirect employment opportunities across the country.

EXPORT DIVERSIFICATION SCHEME

The Tk 3,000 crore export scheme targets non-garment sectors, with the BB citing the economy’s heavy concentration in RMG as a vulnerability to sector-specific shocks and shifts in global demand.