Bank loans

“91% of SMEs do not obtain bank loans”

Commercial banks are reluctant to lend to small and medium-sized enterprises (SMEs) despite the sector being the backbone of the country’s economy, experts said on Sunday.

“Commercial banks extend only 18% of their total disbursed loans to the country’s SME sector, which has been extended to only 9% of SMEs. The remaining 91% of SMEs are cut off from bank loan support,” said the FBCCI Group Advisor and Director of DPC Research. said Dr Khondaker Golam Moazzem.

Lending to SMEs as a proportion of total bank lending has been declining in recent years, which is risky for the country’s sustainable development, he added.

Moazzem was speaking at the seminar “Bangabandhu’s reflections on SME development and the current context” in Dhaka.

According to the World Bank, the potential SME loan market in the country is Tk 26,600 crore.

“But the SME sector is neglected in the bank’s credit structure. So banks don’t pay attention to this highly profitable sector,” Moazzem said.

Industry Minister Nurul Majid Mahmud Humayun said: “Banks have not been allowed to make profits by selling dollars only. Making profits is not just for the banks.

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“It is not the banks’ job to widen the urban-rural disparity by lending to large customers in urban areas. Rather, it is their responsibility to work for balanced development.”

FBCCI Chairman Jashim Uddin said SMEs are the backbone of the economy. “But banks are reluctant to lend in this sector. They prefer to lend to large customers.”

Noting that finance is the main problem for the SME sector, the FBCCI Chairman said that the Prime Minister had announced a Tk 22,000 crore incentive package for the SME sector. was not completed within two years while loans to the large sector were disbursed within three months,” the FBCCI Chairman said.