Cash incentive on loans for women-owned SMEs

Bangladesh Bank yesterday declared a cash incentive on dedicated small and medium enterprise (SME) loan programmes for female entrepreneurs.

Both the loan disbursing bank and female entrepreneur will avail 1% incentive from Bangladesh Bank’s own fund, according to a central bank notice.

A central bank official said female entrepreneurs would enjoy the incentive against the principal amount.

The incentive, which is styled “Cash Incentive Support to Disbursed Loans among Women Entrepreneurs in the CMSME sector”, will be provided after the entrepreneurs pay their monthly or quarterly installment to banks.

In addition, banks will also get a 1 per cent incentive such that they are prompted to disburse SME loans among women.

The central bank has set a target to disburse at least 15 per cent of the annual SME loans among women-owned businesses within 2024.

Women-owned enterprises now account for a maximum of 4 per cent of the total SME loans disbursed annually.

The incentive will be given between July 1 this year and December 2024.

Banks will have to preserve all cash incentive-related information at their respective databases.

Clients will be able to enjoy the incentive within five working days after banks manage the fund from the central bank.

On August 4, the central bank took another initiative allowing female entrepreneurs to take loans at a lower interest rate than what was stipulated earlier from one of its refinance schemes.

Under the programme, women entrepreneurs are able to borrow at a 5 per cent interest rate.

Both male and female entrepreneurs could earlier avail loans from the refinance scheme, but only women-headed businesses are now allowed to get financing from the facility.

The volume of the fund is Tk 1,500 crore.

Under the scheme, banks and non-bank financial institutions will receive funds from the central bank at 0.50 per cent interest rate. The lenders can charge 5 per cent as the lending rate.

Source: The Daily Star