The Bangladesh Bank will order banks to lend to small and medium enterprises through non-governmental organisations for a rapid growth of the SME sector, Governor Fazle Kabir said yesterday.
“I will direct all chief executive officers of the banks to provide SME loans to entrepreneurs through NGOs,” he said.
He spoke while addressing a seminar styled “Promoting microenterprises in Bangladesh: current status and future” at Bangabandhu International Conference Center in Dhaka. The Palli Karma-Sahayak Foundation (PKSF) organised the event as part of its Development Fair 2019 starting today.
State-run PKSF provides Tk 1 lakh to Tk 10 lakh SME loans through 250 partner NGOs in order to create entrepreneurs and jobs in rural areas. Currently, banks distribute farm loans through NGOs.
The governor said only 7 to 10 percent of large default loans were recovered whereas the recovery rate is 95 percent in case of small loans.
“Micro-entrepreneurs are contributing to the economy and creating jobs in rural areas. So, we need to promote the SME sector,” he said.
Md Murad Hassan, state minister for information, said the government is emphasising the SME sector to promote businesses.
He gave credits to the PKSF and its partner NGOs for impressive economic growth and also appreciated the micro-entrepreneurs for their innovative ideas and entrepreneurship.
“There is a great potential to develop the economy through these entrepreneurs.”
Prof MA Sattar Mandal, a former vice-chancellor of the Bangladesh Agricultural University, suggested running massive productive activities instead of traditional development programmes in order to create entrepreneurs and jobs which would contribute to the development of the economy.
He called for introducing modern technologies among micro-entrepreneurs to change the gear for more production and expand the market, instead of focusing only on the local market.
While moderating the seminar, Qazi Kholiquzzaman Ahmad, chairman of the PKSF, said they are giving attention to micro-entrepreneurs to achieve sustainable economic development. The PKSF provides micro-finance to the poor as part of its poverty alleviation efforts.
Md Fazlul Kader, a deputy managing director of the state-run agency, in his keynote speech, said the growth of microenterprises has significant impact on reducing poverty and hunger, ensuring good health and well-being, promoting inclusive and sustainable growth, and laying the foundation for sustainable industrialisation.
“We should go for nourishing our small entrepreneurs to grow big to compete with large companies and multinational companies. The micro-entrepreneurs should be linked with the big companies in a commercially sustainable way,” he added.