STAR BUSINESS REPORT

The Bangladesh Bank has launched four refinance schemes worth a combined Tk 19,000 crore to ease financing constraints on small businesses and farmers, stimulate green investment, generate employment and reduce the country’s heavy dependence on the readymade garment sector for export earnings.

The central bank announced the funds through separate circulars issued on June 7 and June 8, covering a Tk 5,000 crore working capital fund for cottage, micro, small and medium enterprises (CMSMEs); a Tk 3,000 crore export diversification scheme; a Tk 10,000 crore agricultural refinance scheme; and a Tk 1,000 crore green industries and factories fund.

Under all four schemes, participating banks may obtain refinancing from Bangladesh Bank at rates ranging from 2 to 4 percent and lend to customers at maximum rates between 5 and 9 percent, depending on the scheme.

Funds for the CMSME and the export diversification schemes will be drawn from the surplus liquidity of scheduled banks, while the agriculture and green factory schemes will be funded from Bangladesh Bank’s own resources.

The announcements come as businesses continue to struggle with high borrowing costs, liquidity shortages and weak demand, while policymakers seek to broaden the country’s export base and strengthen food security amid growing global competition.

Tk 5,000cr FOR CMSMEs

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 revolving fund will stay operational for three years. It 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. Borrowers classified as defaulters in the Credit Information Bureau (CIB) database will not be eligible.

The central bank 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.

Tk 3,000cr FOR EXPORTS

The export refinance 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.

Refinancing support will be available for industries listed under the highest-priority and special development sectors in the Export Policy 2024-27. Priority will go to producers and exporters using domestically sourced raw materials, particularly in jute and leather.

Financing will be in the form of term loans or investments in local currency. The scheme will run for three years and may include a grace period of up to six months, BB stated in the circular.

Borrowers must maintain a satisfactory credit record. Defaulters will not qualify, and applications will be rejected if export proceeds are not repatriated through the formal banking channel.