IFC, BB sign deal on Credit Guarantee Scheme
To support small businesses facing financing challenges due to the impacts of COVID-19, IFC has signed an agreement with Bangladesh Bank to implement a Credit Guarantee Scheme (CGS) for Cottage, Micro, Small and Medium Enterprises (CMSMEs). By offering a risk-sharing arrangement for participating financial institutions (PFIs), the scheme will allow the PFIs to provide better access to finance for CMSMEs that are often deprived due to their high-risk profile. With about 7.8 million units employing more than 20 million people, cottage, micro, small, and medium enterprises (CMSMEs) account for almost 25 per cent of gross domestic product and 30 per cent of total industrial employment in Bangladesh. However, limited access to finance has been an impediment in sustaining this labour-intensive sector that is critical for the country’s sustained growth. The government of Bangladesh will allocate funding for the CGS facility, while IFC will provide technical assistance to implement the project. Loans worth $100 million are expected to be disbursed by financial institutions to CMSMEs by the end of June 30, 2025. At present, Cottage, Micro & Small category loans ranging from Tk 200,000-5,000,000 (BDT 2 Lac to BDT 50 Lac) are eligible for the Credit Guarantee Scheme. A total of 31 banks and Non-Bank Financial Institutions have signed up for the CGS facility.
BB relaxes rules for foreigners to remit money
The central bank yesterday relaxed rules for foreign nationals residing in Bangladesh to send remittances to their home countries. Foreigners were allowed to send 75 per cent of their monthly income to their home, but now they will be able to remit up to 80 per cent. The rest of the money, kept in the form of savings in banks, could be repatriated when the foreigners left permanently after expiry of their job contracts. Before sending the remittances, banks will have to ensure that the amount being moved does not exceed the balance in related bank accounts of the foreigners.
ICB to issue mudaraba sukuk worth Tk 1,000cr
The Investment Corporation of Bangladesh has decided to issue an ICB First Mudaraba Sukuk worth Tk 1,000 crore for 10 years. The state-run listed non-bank financial institution disclosed the information through a notification on the Dhaka Stock Exchange website (DSE) yesterday. Now, the company will complete the paperworks and seek permission from the regulators, including the Bangladesh Securities and Exchange Commission. To redeem the principal of sukuk, 20 per cent of the issued capital will be paid at the end of each 6th, 7th, 8th and 9th year.
Prime Bank launches mortgage-free loan for dealers of GPH Ispat
Prime Bank has introduced a dedicated Distributor Financing Programme named “Prime Dealer” to serve the dealers/distributors of large corporates across the country. Under the Prime Dealer programme, Prime Bank Ltd has initiated a strategic partnership with GPH Ispat Ltd. The partnership will help registered GPH Ispat dealers to enjoy collateral-free MSME loan up to Tk 10 million (1.0 crore) from Prime Bank with 24/7 banking services and a dedicated dealer helpdesk.