Update February 9, 2015

Dhaka 3-25 am, 30-September, 2020

Business finance window worth Tk 200cr launched in the country

Sumel Sarker

Bangladesh Bank Governor Dr Atiur Rahman speaks at the inauguration of a five-year porject on business finance with an aim to support the neglected sectors in Bangladesh.

Bangladesh Bank Governor Dr Atiur Rahman speaks at the inauguration of a five-year project on business finance with an aim to support the neglected sectors in Bangladesh.

09 February, Nirapad News: Bangladesh Bank Governor Atiur Rahman inaugurated the five-year project titled “Business Finance for the Poor in Bangladesh (BFP-B)” worth around Tk 200 crore, equivalent to 22.5 m euros, at a function held in the capital yesterday.

The beneficiaries of the project, which specifically targets new micro and small enterprises, must be without having any prior access to the banking sector.

BFP-B is funded with UK aid from the UK government and implemented by Nathan Association (London) and Oxford Policy Management, well-known international consulting firms and research institutions. Bangladesh Bank is the implementing agency while the Ministry of Finance is the executing agency.

The target of the project is to generate 33,000 new jobs and to create some 19,000 new borrowers under the program. The project is composed of three components a challenge fund, a credit guarantee fund and a policy component.

Challenge fund will underwrite innovative approaches to increase financial inclusive in Bangladesh such as extending branch banking services to unserved or under-served Micro and Small Enterprises (MSEs), as per project concept paper.

The credit guarantee fund will support commercial banks’ extension of loans and other services to new MSE customers, particularly female-headed firms and rural enterprises nationwide.

The fund will guarantee up to 80% of eligible loans to support working capital and fixed asset financing up to a maximum tenure of seven years.

The credit guarantee fund will guarantee the principal amounts of highest Tk 1 crore and lowest Tk 50,000.

The eligibility for the BFP-B fund is the MSEs with a minimum of one year’s profitable operations, an enterprise having at least 51% share by Bangladesh private sector, minimum of two employees and maximum of 40 employees.

Manufacturing, agro-processing, services and trading sectors are entitled to get the fund benefit.

BFP-B is managed by a team of development professionals provided by leading international consulting firms Nathan Associates (London) and Oxford Policy Management. The team leader is David Munro, a development professional with extensive experience in MSE finance and guarantee fund operations in Asia, the Middle East and Africa.

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