Abu Sazzad :
About 58.40 per cent or maximum portion of the SME loans went to the unproductive sectors during the first six months (January to June) of the current year 2015.
Banks and non-bank financial institutions (NBFIs) disbursed Tk 56,1332.39 crore under SME loan during the period. Of the total loan, Tk 35,561.50 crore has been disbursed to trading sector, Tk 15,071.04 crore to manufacturing sector and Tk 5,699.85 crore to service sector, according to Bangladesh Bank data.
In January-June period of 2015, the SME loan disbursement by banks and the NBFIs in the trade sector increased by 16.56 per cent to Tk 35,561.50 crore against Tk 30,507.07 crore during the same period of 2014.
Policy Research Institute Executive Director Ahsan H Mansur said, the SME loan disbursement process of banks was not transparent, as some of them usually showed other loans as SME credit.
He suggested that the central bank should ask the banks to preserve the records of the clients to detect whether the SME loans actually went to the small and medium entrepreneurs or not.
Banks and NBFIs usually give higher SME loans to the trade sector, as this kind of credit is less risky than the loans given to the manufacturing sector, he said.
The BB should introduce a credit guarantee scheme for the new manufacturers so that banks will feel encouraged disbursing loans in favour of fresh entrepreneurs.
Under the scheme, banks will get fund to cover their losses if clients become loan defaulters, he said. Under the process, banks will be encouraged gradually to increase their loan disbursement to the manufacturing sector, he added.
Economist Mamunur Rashid said, the key goal of supporting the SMEs could not be achieved due to the higher loan disbursement to the trade or unproductive sector.
Higher loan disbursement to the trade sector usually puts a negative impact on the country’s overall economy, as such trend fails to expand the industrial sector and makes a little contribution to employment generation, he said.
According to Bangladesh Bank data, the manufacturing sector got 26.84 per cent of the total SME loans disbursed in the first six months of 2015, while the service sector received 10.15 per cent.
A senior BB official said, SME loan disbursement increased significantly in the first six months of 2015 but it put a little impact on the country’s industrialization.
About 58.40 per cent or maximum portion of the SME loans went to the unproductive sectors during the first six months (January to June) of the current year 2015.
Banks and non-bank financial institutions (NBFIs) disbursed Tk 56,1332.39 crore under SME loan during the period. Of the total loan, Tk 35,561.50 crore has been disbursed to trading sector, Tk 15,071.04 crore to manufacturing sector and Tk 5,699.85 crore to service sector, according to Bangladesh Bank data.
In January-June period of 2015, the SME loan disbursement by banks and the NBFIs in the trade sector increased by 16.56 per cent to Tk 35,561.50 crore against Tk 30,507.07 crore during the same period of 2014.
Policy Research Institute Executive Director Ahsan H Mansur said, the SME loan disbursement process of banks was not transparent, as some of them usually showed other loans as SME credit.
He suggested that the central bank should ask the banks to preserve the records of the clients to detect whether the SME loans actually went to the small and medium entrepreneurs or not.
Banks and NBFIs usually give higher SME loans to the trade sector, as this kind of credit is less risky than the loans given to the manufacturing sector, he said.
The BB should introduce a credit guarantee scheme for the new manufacturers so that banks will feel encouraged disbursing loans in favour of fresh entrepreneurs.
Under the scheme, banks will get fund to cover their losses if clients become loan defaulters, he said. Under the process, banks will be encouraged gradually to increase their loan disbursement to the manufacturing sector, he added.
Economist Mamunur Rashid said, the key goal of supporting the SMEs could not be achieved due to the higher loan disbursement to the trade or unproductive sector.
Higher loan disbursement to the trade sector usually puts a negative impact on the country’s overall economy, as such trend fails to expand the industrial sector and makes a little contribution to employment generation, he said.
According to Bangladesh Bank data, the manufacturing sector got 26.84 per cent of the total SME loans disbursed in the first six months of 2015, while the service sector received 10.15 per cent.
A senior BB official said, SME loan disbursement increased significantly in the first six months of 2015 but it put a little impact on the country’s industrialization.
