The small entrepreneurs demanded collateral free loan facility and grace period for repayment through the SME banking window at a discussion meeting held in the capital on Thursday. The SME Foundation organised the discussion meeting at the SME fair jointly staged by the SMEF and the Bangladesh Bank. Entrepreneurs alleged that banks do not provide loans to women and fresh entrepreneurs without collateral which was a major barrier for small entrepreneurs.
They also said the banks should introduce grace period for loan repayment under SME banking.
‘The small entrepreneurs do not have collateral but the banks are reluctant to provide loans without it. If the small business people had such asset for collateral then they would not need SME banking,’ Mujibur Rahman, an entrepreneur said at the discussion meeting held at Pan Pacific Sonargaon Hotel.
He said that banks should look for other alternative tools so that they can secure investment without collateral.
Another entrepreneur said that banks should introduce grace period as many businesses cannot go for immediate profit making situation after getting the loan.
‘So, giving a considerable grace period based on the amount of loan would ensure more efficient use of SME loans,’ he said.
Bangladesh Bank executive director Nirmal Chandra Bhakta said introducing grace period should be possible to help the small entrepreneurs.
‘I don’t see any problem giving grace period as the banks will get the return with interest. Such facilities can be given under bank-client relationship,’ he said.
‘I would consult with the banks and try to provide an uniform circular for giving grace period to SME loans,’ he said.
Speaking as the chief guest, former deputy governor of BB Ibrahim Khaled said that the banks should consider the cash flow and amount receivable as an alternative to collateral.
‘If those are positive then there could be an alternative to collateral for small businesses,’ he said.
He also said that the government should change the name of SME banking to Small and Micro Entrepreneur banking as including middle enterprise affects the priority of the small ones.
‘When you bring a strong segment and weak segment together then strong segment will always get most of the benefit,’ he said.
SMEF managing director Syed Ihsanul Karim and other senior officials of Bangladesh Bank and private commercial banks were present on the occasion.
-With New Age input
