Bangladesh Bank has made it easier for marginalised people, micro-entrepreneurs, low-income workers, small traders and students to get loans. Under newly revised rules, a borrower can take a loan of up to Tk 10 lakh. Loans of up to Tk 5 lakh need no mortgage of property or other collateral, but the borrower must have up to two personal guarantors.
The interest or profit rate on these loans is capped at 7 percent.
Bangladesh Bank’s Financial Inclusion Department issued the new circular on Thursday (12 November). It changes the rules of the central bank’s Tk 1,500 crore refinance fund. The circular has been sent to the managing directors and chief executives of all scheduled banks in the country.
The fund, financed by Bangladesh Bank itself, will run for five years from the day the circular was issued. Its main aims are to bring marginalised and disadvantaged people into income-generating work, improve their living standards and widen access to banking.
Who can get the loan?
Under the new rules, people in many occupations can take the loan, among them fishers, carpenters, goldsmiths, blacksmiths, potters, tailors, hawkers, pedlars, and rickshaw and van drivers. Electronics and electrical repairers, woodworkers, masons, painters, plumbers, makers of pickles and pitha, small-scale weavers and tea workers are also covered.
Among small traders, grocers and general store owners, mobile cloth sellers, mobile recharge and mobile financial services (MFS) agents, food sellers, tea and paan sellers, book and newspaper sellers, and vegetable, fruit and flower traders can get loans.
Poultry and livestock farmers, fish and shrimp farmers, vegetable growers, nursery entrepreneurs, artisans, people in cottage industries, freelancers and people engaged in innovative work will also be considered eligible.
Women entrepreneurs get special priority: at least 25 percent of all loans disbursed must go to women borrowers, with marginalised and micro women entrepreneurs given priority.
Special terms for farmers, migrant workers and students
Marginal and landless farmers who hold a smart card under the Department of Agricultural Extension’s Farmer Smart Card Policy 2025 can open a Tk 10 bank account and borrow on a priority basis. Ordinary farmers without a smart card will not be excluded.
Low-income workers and small traders hit by river erosion, floods, cyclones, drought, fire, earthquakes or epidemics will also get priority. Low-income people in coastal, char and haor areas, members of small ethnic communities, people with disabilities and third-gender people can borrow for income-generating activities.
Special terms are also set for those who receive remittances from abroad, for workers who have returned from abroad and for their families.
Disadvantaged and needy students under 25 can get the loan. With a parent or guardian as guarantor, they can borrow for technical, vocational, IT and other training. Once they turn 18, they can also borrow to start a business using the skills they have gained.
Students will also get priority for loans, with a guardian as guarantor, to pay for higher education, including MBBS, BDS and engineering, and to buy study materials.
How much can individuals and groups borrow?
Under the rules, an individual borrower or micro-entrepreneur can take up to Tk 10 lakh, with the amount set according to their actual need.
Loans of up to Tk 5 lakh need no mortgage or collateral, but personal guarantees from up to two people are required.
To borrow as a group, two to five people can form a group. Each member can then get up to Tk 8 lakh and the whole group up to Tk 40 lakh, with every member jointly and individually liable for repayment.
Approved loans will be paid out through designated Tk 10, Tk 50 or Tk 100 bank accounts. Those without such an account will have to open one.
Interest rate and repayment period
Bangladesh Bank will give refinancing to participating commercial banks at 1 percent interest. The interest or profit rate charged to borrowers is capped at 7 percent, and Shariah-based banks may not charge a profit rate above 7 percent either.
Borrowers can get a grace period of up to six months before repayment starts. Including the grace period, the maximum loan term is 60 months, or five years.
After the grace period, banks can collect principal and profit in monthly, quarterly, half-yearly or yearly instalments.
Who cannot get the loan
Loan defaulters cannot borrow under the scheme. Nor can anyone who has not repaid or settled an earlier loan taken under another government or Bangladesh Bank refinance scheme or interest subsidy.
Before approving a loan, banks must check the applicant’s borrowing history. For loans of up to Tk 3 lakh, however, no fee may be charged for obtaining the Credit Information Bureau (CIB) report.
Banks can disburse loans and collect instalments through their own branches and sub-branches, agent banking, MFS and online or internet banking. No service fee may be charged beyond the set charges. Banks must monitor whether the loan money is being used properly and send this information to Bangladesh Bank every three months.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report