Industries ministry seeks Tk1,100cr as seed money for small entrepreneurs

The industries ministry has sought Tk1,100 crore as seed money under the package announced for the SME sector after the Covid-19 outbreak to provide loan assistance to micro and small entrepreneurs outside the banking system.

With the seed money, the SME Foundation and BISCIC will implement a loan program of Tk500 crore and Tk600 crore respectively for micro and small entrepreneurs, a press release reads.

The ministry has taken the initiative considering that the small, cottage and cottage industries have been affected due to the Covid-19 outbreak. 

The ministry has sent a letter to the finance ministry on April 30. 

In the letter, it has sought the amount of money in favor of SME Foundation and Bangladesh Small and Cottage Industries Corporation (BSCIC) for the implementation of the special loan program.

A committee named 'SME Sector Revitalization Committee' was formed on April 16 to monitor the overall aspects of the SME sector for the implementation of the announced stimulus package and to work towards bringing mainstream, small and cottage, medium-sized industrial entrepreneurs, workers and those involved in the supply chain back into the mainstream in the future.

The 11-member committee, headed by an additional secretary in the industry ministry, has been asked to formulate effective steps and recommendations in this regard.

In the light of the decision taken at the 1st meeting of the SME Sector Revitalization Committee held on April 22 through video conferencing, the industries ministry has written to the finance ministry to allocate a total of Tk1,100 crore as seed money in favor of SME Foundation and BISCIC for the implementation of the special loan program.

Accorting to the Bangladesh Bank circular to disburse the stimulus package for the SME sector, commercial banks will conduct lending activities on the basis of bank-customer relationship and the previous borrowers will get special benefits in case of taking loans. 

But there are a good number of micro and small entrepreneurs outside the banking system in the country.

The Bangladesh Bureau of Statistics Survey 2019 says 87 percent of the country's 47,291 manufacturing units are small and cottage industries. 

At present, small and cottage industries produce 33 percnt of the country's production sector and employ 13.91 lakh workers and employees.