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Monday November 13, 3:19 PMBangladesh c.bank asks lenders to cut interest for SMEsDHAKA, Oct 13 (Reuters) - Bangladesh's central bank has asked commercial banks to lower interest on loans to small and medium enterprises (SMEs), a senior official said on Monday."SMEs are very important for us as they provide huge employment in our densely populated country," Murshid Kuli Khan, an executive director of Bangladesh Bank, told Reuters. Currently, the banks charge the SMEs interest of between 11 percent and 22.5 percent. The central bank wants the rates reduced to single digits. "It is recognised that the country's estimated 6 million SMEs and micro enterprises -- firms with less than 100 employees -- have a significant role in generating growth and jobs," an Asian Development Bank (ADB) document said. Bangladesh's SME sector contributed up to 25 percent of the country's GDP last year, about 40 percent of manufacturing output, 80 percent of industrial jobs, and around 25 percent of the total labour force, the ADB said. The central bank has already increased funding earmarked for SMEs to 2 billion taka ($29.2 million) from 1 billion taka, Bangladesh Bank said. The central bank will receive a grant of 1.3 billion taka from Britain's Department for International Development to develop SMEs in Bangladesh. The ADB will also support efforts by the Bangladesh government to foster development of the country's SME sector, through an assistance package approved recently totalling $50 million, officials said. (US$1 = 68.50 taka) |
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