Central bank frames policy on startup financing
The Bangladesh Bank (BB) has formulated a policy relating to the disbursement of funds worth Tk 5.0 billion for startups. The disbursement of funds to the startup clients will be made collateral-free. The central bank’s SME and Special Programmes Department issued a circular detailing the policy on Monday. The BB would form the Tk 5.0-billion refinancing fund to help the country’s startups. Banks will disburse money from the fund to the startups. Besides, the commercial banks will constitute their own and separate funds for the startups. Individual banks will form their own funds with money equivalent to 1.0 per cent of their respective operating profits for the year 2020. The banks will formulate separate policies to this end, to be approved by their respective boards. The highest ceiling for loan from the fund will be Tk 10 million having a maximum of five-year repayment period. The startups concerned will get a grace period of one year to repay loans, either in quarterly or semi-annual basis. Educational certificates of the startups entrepreneurs will be treated as collateral for loans. Each bank will preserve 10 per cent quota for women entrepreneurs. According to the BB, startup means innovations for marketing new products, services and technologies, and such enterprises would create employment and assets in the country. Meanwhile, the Startup Bangladesh Limited, a platform to support new business ideas, will provide 50 startups with Tk 1.0 billion venture capital within this year, marking the birth centenary of Bangabandhu Sheikh Mujibur Rahman.
Dhaka Bank wins AsiaMoney award
Dhaka Bank has recently been presented a “Best Corporate and Investment Bank of Bangladesh 2021” title by global financial publication AsiaMoney for “comprehensive coverage from corporate clients to investment banking and capital markets” and riding out the pandemic. It recently introduced blockchain, web-based service Dhaka Bank TradeCloud and automated invoice and distributor financing solution Dhaka Bank Bills2Cash.
Humaira Azam becomes first female MD of a commercial bank
Humaira Azam has become the first female managing director of a commercial bank in Bangladesh after Trust Bank appointed her to the top job. Trust Bank, a private sector lender, took the decision on Monday and the hiring is subject to the approval of the central bank.Ms. Humaira started her banking career as a management trainee officer at ANZ Grindlays Bank in 1990.Later, she worked at various local and foreign banks, and non-bank financial institutions (NBFIs). In 2009, she was appointed as managing director of IPDC Finance Ltd. She was given the top job at a time when the NBFI was facing troubles because of a large amount of defaulted loans.Trust Bank recruited her as an additional managing director in 2018. Currently, she is serving the private commercial lender as an acting managing director.
SMEs need credit the most
Bangladesh Bank has identified 13 sectors of the economy that have been severely affected by the first wave of the coronavirus pandemic, including travel and tourism, readymade garments, textile and small and medium enterprises. They were identified in a central bank survey involving the country’s 59 banks.As much as 51 banks thought that travel and tourism were “dreadfully affected”. Forty-seven banks identified the garment and textile sector, 45 banks identified SMEs, 32 banks identified real estate and construction, and 28 banks identified education as the dreadfully affected.The RMG and textile sector was the second highest credit-deserving sector as per 53 banks. The sector faced export orders cancellations and lower demand owing to uncertainty and continuation of the pandemic’s spread in advanced economies. Some 42 respondents perceived that the trade and commerce sector had the potential to grow fast and would require more credit to bring its growth momentum back on track.The BCB can be a 30-year development bond. It might be issued both in local and foreign currency to attract local and global investors.The government can also think of bringing the SMEs under a relaxed tax policy. Healthy growth of the SME sector is vital from an employment perspective. The central bank official said a fresh study should be carried out as the second wave of coronavirus infections has already hit the country.