The Bangladesh Bank has decreased the fees associated with loan guarantee facilities for entrepreneurs in the cottage, micro, small, and medium enterprises (CMSMEs), and financial inclusion sectors.
The central bank issued a circular to this effect on Monday.
Banks or financial institutions participating in the plan are required to pay a guarantee charge of 0.50 per cent for the first year of the loan.
However, after the first year, and subject to the guarantee’s validity, the price required in subsequent years has been decreased to 0.25 percent from 0.75 per cent per year.
According to the circular, the central bank made this decision in response to the need to make credit guarantee facilities more affordable and accessible to entrepreneurs.
On 8th November last year, the Bangladesh Bank set the 0.75 per cent fee for consecutive years after the initial year.
The central bank underlined the CMSME sector’s positive elements, such as its contribution to economic growth, reduction of rich-poor and regional inequities, and promotion of inclusive development, especially women’s empowerment.
