B Mirror Report: Bangladesh Bank has directed banks and financial institutions to disburse the full Tk 5,000 crore under its refinancing scheme for cottage, micro and small enterprises (CMSMEs) by November.

Around Tk 450 crore has already been disbursed under the scheme over the past two weeks, City Bank Managing Director Mashrur Arefin told journalists after a meeting with a Bangladesh Bank deputy governor on Thursday.

The meeting was attended by managing directors of 36 banks and five financial institutions.

Arefin said the Tk 5,000 crore scheme is important for small businesses at the grassroots level, particularly those facing working capital shortages to purchase everyday goods. Eligible entrepreneurs will be able to access loans under the scheme at relatively lower interest rates.

He said loan disbursement began after agreements were signed with banks around September 10. About Tk 450 crore was disbursed during the first two weeks, while banks have been urged to accelerate disbursement to meet the November deadline.

The meeting also discussed Bangladesh Bank’s ‘Udyog’ project for young entrepreneurs. Arefin said the project is being piloted in selected districts across several divisions but has not received the expected response.

Banks have therefore been instructed to increase promotional activities for the project at the upazila, union and district levels.

Under the ‘Udyog’ project, young entrepreneurs can receive support of up to Tk 10 lakh, along with an additional loan facility of up to Tk 10 lakh. The initiative particularly aims to bring entrepreneurs aged 21 or below under its coverage.

Regarding allegations that banks were reluctant to support the Tk 60,000 crore package aimed at reviving closed and partially closed industrial units, Arefin said he did not agree with the claim.

He said banks and Bangladesh Bank are interested in financing factories that are closed, partially closed or operating below capacity. However, he stressed that financing must be structured carefully to prevent the creation of new default loans.

“Loans cannot be disbursed merely to meet targets,” Arefin said, stressing that financing should go to meaningful and sustainable projects.

He added that although finding suitable projects is currently somewhat challenging, banks are continuing their efforts to identify viable businesses.

According to Arefin, banks and Bangladesh Bank have jointly arranged the financing, and the key objective is to ensure that the funds reach genuine entrepreneurs and those who actually need them.