Cottage, micro, small and medium entrepreneurs, bankers and experts on Wednesday recommended that the documentation process should be simplified for speedy disbursement of stimulus to the CMSME sector to tackle the Covid-19 fallout.
Most CMSME entrepreneurs are yet to get the benefits of the announced stimulus package due to the existing complex documentation process and lengthy procedures leading to slower disbursement, they said at a webinar organised by the Dhaka Chamber of Commerce and Industry on ‘CMSME’s Access to Finance and the Way Forward’ held on the day.
They also said that the capacities of the Bangladesh Small and Cottage Industries Corporation, the SME Foundation and Palli Karma Sahayak Foundation might be utilised to ensure that the stimulus reached the rural parts of the country.
DCCI president Shams Mahmud said that the CMSME sector represented 13 million business entities constituting about 35.5 per cent of jobs in the country.
But many entrepreneurs are facing challenges in getting loans from the government announced Tk 20,000-crore stimulus due to various procedural complexities.
DCCI senior vice-president NKA Mobin, in a presentation, said that the CMSME sector sales had come down to 35 per cent due the adverse impacts of Covid-19.
About 62.4 per cent of the CMSMEs have become unable to pay salaries, taxes and VAT now, he said.
Most of the entrepreneurs are facing challenges in fulfilling all the bank requirements while 59 per cent of the CMSMEs find the loan disbursement process complex, the said.
Bangladesh Bank executive director Abu Farah Md Naser said that the risks of loan classification were very low for the CMSMEs.
He said that the credit guarantee scheme would ease access to finance, especially for the CMSMEs.
The Bangladesh Bank will consider whether lending as working capital can be treated as term loan, he said, adding that other non-banking institutions might be included in disbursement of the stimulus.
BSCIC general manager Akhil Ranjan Tarafder said that the documentation process, collateral issues, lengthy processing time and the banks’ unwillingness were some of the reasons behind slow disbursement of the stimulus.
SME Foundation general manager Nazeem Sattar said that the central bank should allow institutions like the SME Foundation, BSCIC and PKSF to disburse loans to the SMEs.
Bangladesh Krishi Bank deputy managing director Md Afzal Karim said that many small entrepreneurs were being deprived of getting the required loans due to collateral issues.
BRAC Bank SME head Syed Abdul Momen urged that more trading-based entrepreneurs should be allowed access to the stimulus.
Dutch Bangla Bank Ltd executive vice-president Anwar Faruque Talukder suggested that the repayment tenure of the stimulus should be raised from the current one year.
DCCI vice-president Mohammad Bashiruddin, EXIM Bank additional deputy managing director Sk Moyeen Uddin, industries ministry joint secretary Ferdousi Begum, ONE Bank SME head Kamrul Hasan, Mutual Trust Bank SME head Sanjib Kumar Dey, Prime Bank MSME head Syed M Omar Tayub and Premier Bank EVP Mohammad Emtiaz Uddin, among others, spoke at the programme.
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