ACCORDING to a report by a local daily, the scheduled banks and non-bank financial institutions continued to ignore the rural entrepreneurs disbursing only 23.86 per cent of their total sanctioned SME loans among them in the first half of this year. According to the latest Bangladesh Bank data, the banks and the NBFIs disbursed Tk 11,252.46 crore in loans to the SMEs located in the rural areas from January to June of 2014 under the BB’s small and medium enterprises credit programme. They distributed total Tk 47,160.92 crore under the programme in the period. Experts and BB officials said that a number of banks and NBFIs were reluctant to disburse loans to the SMEs located in the rural areas as they were not bound by laws to give certain amount of such loans in the rural areas.
Due to the lower SME loan disbursement in the rural areas, the cluster-oriented SME industries were not getting adequate loans from the banks and the NBFIs resulting that the SME activities of the BB left very little impact on the country’s rural economic situation, they said.
The four state-owned commercial banks – Sonali, Janata, Agrani and Rupali – disbursed Tk 554.58 crore, or 19.29 per cent of their total distributed SME loans of Tk 2,874.83 crore in the period. The BB data showed that the local private commercial banks disbursed Tk 10,142.76 crore, or 24.96 per cent of their total distributed SME loans of Tk 40,637.70 crore. The foreign commercial banks disbursed only Tk 2.50 crore, or 0.57 per cent of their total distributed SME loans of Tk 438.49 crore.In the first six months of this year, the 31 NBFIs disbursed SME loans of Tk 210.23 crore, or 13.24 per cent of their total distributed SME loans of Tk 1,587.65 crore. The BB data, however, showed that the SME loan disbursement by the banks and the NBFIs in the first six months of this year increased by 12.62 per cent from that of the same period a year ago. That is, over the years banks failed to meet the SME loan quota.
It is unfortunate that most banks see profits as their only motivation – if there had not been any regulations regarding disbursement of SME loans they probably would not have disbursed the amounts, which they are currently disbursing.
Considering from the narrow profit-making viewpoint, it may be good for the banks to make large volume loans to a few clients. But viewing it from a wider angle of national economy, more so from the prospective of rejuvenating rural agro economy and mass employment generation, it is nearly committing a crime by the banks ignoring the rural stakeholders of the economy.
Banks should remember that the large company of today was the small startup of yesterday – if it had no seed capital it could not be what it is now, and thus act accordingly to help the small firms, wherever they may be located. Social responsibility, and not just profits, should be at the heart of its motto.
