The New Nation - Internet Edition

Staff Reporter

Bangladesh Bank yesterday issued a circular allowing the Commercial Banks to engage NGOs in their lending process to reduce the supervision cost and expand loans for small and medium enterprises (SMEs) and agriculture.

According to the circular, the banks from now on would be able to take the help of NGOs in the processes of borrower selection, credit disbursement and loan recovery.

The central bank has been insisting the commercial banks to increase bank loans for the real sector, including agriculture and SMEs sectors, to stimulate the economic growth.

The central bank has also extended the tenure of mid-term loans for the medium enterprises from three years to four years.

Repayment of the loans with interest, if availed of the Bangladesh Bank's refinancing facility, would have to be made in 7 instalments with six months rebate from the date of disbursement.

Meanwhile, another circular defined that enterprises having fixed assets equivalent to a range between Tk 50,000 and Tk 50,00,000, without land and buildings, and manpower not more than 25 will be considered as small enterprises in the cases of services and commercial sectors.

Enterprises having fixed assets equivalent to a range between Tk 50,000 and Tk 1.50 crore without land and buildings and manpower not more than 50 will be treated as small manufacturing concerns.

For medium services and commercial enterprises, the fixed asset value without land and buildings was set at a range between Tk 50,00,000 and Tk 10 crore while manpower not more than 50.

And an enterprise will be considered as a medium manufacturing concern if its value of fixed assets ranges between Tk 1.50 crore and Tk 20 crore, and manpower not more than 150.