The SME Foundation, operating under the industries ministry, has requested a fresh allocation of Tk 500 crore from the government to provide loans to entrepreneurs in the upcoming fiscal year 2024-25. The foundation also seeks approval to raise the interest rate on these loans from 4 % to 7 %. This demand arises from increased demand for SME loans amid insufficient funds.
The Ministry of Industries has written to the Financial Institutions Division under the Ministry of Finance to allocate new funds and adjust interest rates accordingly. Previously, Tk 300 crore was allocated to the SME Foundation during the Covid-19 pandemic, but most of the disbursed loans remain unpaid, leaving insufficient funds for new initiatives. The foundation distributes loans through various banks and non-bank financial institutions, proposing a new interest distribution mechanism where 5 % goes to the disbursing institution and 2 % to the foundation.
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