SME Foundation and Prime Bank Sign Agreement to Boost CMSME Growth with Low-Interest, Collateral-Free Loans
In a significant move to bolster the country’s industrial landscape, SME Foundation and Prime Bank have officially entered into a refinancing agreement aimed at enhancing credit access for Cottage, Micro, Small, and Medium Enterprises (CMSMEs). This collaboration operates under the government’s BDT 300 crore Revolving Fund and follows the Credit Wholesaling guidelines designed to stimulate economic growth at the grassroots level.
The formal signing took place in Dhaka recently in the presence of the Minister for Industries, Commerce, and Textiles & Jute, Khandaker Abdul Muktadir, who highlighted the government’s commitment to fostering a business-friendly environment for small-scale entrepreneurs.
Under this agreement, Prime Bank will facilitate low-cost loans to eligible entrepreneurs with a maximum interest rate capped at 8% per annum. The financing facility is designed to be highly accessible, offering loan amounts ranging from BDT 1 Lac to as much as BDT 25 Lac depending on the nature of the enterprise. To further ease the burden on small business owners, the program provides a flexible repayment window of up to four years, which includes a six-month grace period to allow businesses sufficient time to generate returns before beginning their monthly installments.
A core focus of this initiative is the promotion of financial inclusion and social equity. The agreement mandates that a significant portion of the funds be dedicated to women entrepreneurs and those operating within specific industrial clusters. Additionally, the program prioritizes young innovators in the ICT sector, manufacturers of import-substituting goods, and entrepreneurs located in climate-vulnerable or underprivileged regions. By removing the requirement for formal collateral for loans up to BDT 10 Lac, the partnership ensures that even those without substantial assets can secure the capital necessary to grow their ventures.
The leadership of both SME Foundation and Prime Bank expressed their optimism regarding the impact of this fund on the national economy. Beyond mere lending, the program aims to support sustainable industrialization by encouraging green technologies and helping returning migrants reintegrate into the productive workforce. Prime Bank’s Additional Managing Director, M. Nazeem A. Choudhry, and SME Foundation’s Managing Director, Anwar Hossain Chowdhury, emphasized that this strategic alignment will not only create jobs but also strengthen the overall resilience of the CMSME sector in Bangladesh.
