Staff Reporter :
Institutional lending to the small and medium enterprises (SMEs) saw a sharp rise in the first half of this year, signalling a turnaround in the country’s overall investment climate that was earlier bogged down by political uncertainty and power and energy shortages.
According to a Bangladesh Bank (BB) figure, banks disbursed Tk 69,670 crore as loans to the SME segment as on June 30 this year, 23.59 marking per cent higher compared with Tk 55,326 crore lent during the corresponding period of the previous year.
The disbursed amount was 61.38 per cent of their annual credit target.
The central bank earlier fixed Tk 1,13,508 crore SME lending target for this year.
“SME credit witnessed a significant rise in the January-June period of the current calendar year mainly due to improvement in the country’s business climate and in power supply situation,” Dr Nirmal Chandra Bhakta, Executive Director of BB’s special programmes and SME Department told The New Nation yesterday.
“Besides, a number of existing units have started expanding their operations after availing institutional finance and small enterprises and were able to get bank lending facility that also helped expansion of SME credit,” he added.
Dr Nirmal Chandra Bhakta said also that the central bank set priority to SME lending and over 3.86 lakh beneficiaries availed the finance under the scheme in the first half of this year. “Rise in SME lending is encouraging. Growth in such credit signalling turnaround in the country’s investment climate as well as SMEs,” Dr Salehuddin Ahmed, a former BB governor told The New Nation on Wednesday.
He said although the SME lending is increasing, access to finance remains a big issue. Many small firms are still finding it hard to avail finance under the scheme as banks are not showing much interest in SME lending.
“The central bank should look into the matter and ensure smooth credit flow to the sector. It should extend more help for small firms looking to invest. Expansion of SMEs is vital for economic growth and job creation for people,” he said.
Dr Salehuddin Ahmed also said that BB should properly monitor SME lending by banks to prevent leakage and ensure quality of credit.
