Simplification of documentation sought for speedy disbursement

30 Jul 2020 12:58 AM
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Cottage, micro, small and medium entrepreneurs, bankers and professionals on Wednesday recommended that the documentation process ought to be simplified for speedy disbursement of stimulus to the CMSME sector to deal with the Covid-19 fallout.

Most CMSME entrepreneurs are yet to have the advantages of the announced stimulus bundle as a result of existing complex documentation method and lengthy procedures leading to slower disbursement, they said in a webinar organised simply by the Dhaka Chamber of Commerce and Sector on ‘CMSME’s Usage of Finance and the Way Forward’ held on the day.

In addition they said that the capacities of the Bangladesh Small and Cottage Industries Corporation, the SME Foundation and Palli Karma Sahayak Basis could possibly be utilised to ensure that the stimulus reached the rural parts of the country.

DCCI president Shams Mahmud said that the CMSME sector represented 13 million business entities constituting about 35.5 % of jobs in the country.

But various entrepreneurs are facing challenges in getting loans from the government announced Tk 20,000-crore stimulus because of various procedural complexities.

DCCI senior vice-president NKA Mobin, in a demonstration, said that the CMSME sector revenue had drop to 35 % due the adverse impacts of Covid-19.

About 62.4 per cent of the CMSMEs have grown to be unable to pay out salaries, taxes and VAT now, he said.

A lot of the entrepreneurs are actually facing challenges found in fulfilling all of the bank requirements while 59 % of the CMSMEs find the loan disbursement process complex, the said.

Bangladesh Lender executive director Abu Farah Md Naser said that the risks of mortgage loan classification were suprisingly low for the CMSMEs.

He said that the credit rating guarantee scheme would convenience access to finance, specifically for the CMSMEs.

The Bangladesh Lender will consider whether lending as working capital could be treated as term loan, he said, adding that other non-banking institutions could possibly be contained in disbursement of the stimulus.

BSCIC general supervisor Akhil Ranjan Tarafder said that the documentation method, collateral issues, lengthy processing period and the banking institutions’ unwillingness were a few of the reasons behind slow disbursement of the stimulus.

SME Foundation general supervisor Nazeem Sattar said that the central bank should allow institutions just like the SME Base, BSCIC and PKSF to disburse loans to the SMEs.

Bangladesh Krishi Bank deputy managing director Md Afzal Karim said that lots of small entrepreneurs were getting deprived to getting the required loans due to collateral issues.

BRAC Bank SME mind Syed Abdul Momen urged that more trading-based entrepreneurs should be allowed access to the stimulus.

Dutch Bangla Lender Ltd executive vice-president Anwar Faruque Talukder suggested that the repayment tenure of the stimulus ought to be raised from the existing one year.

DCCI vice-president Mohammad Bashiruddin, EXIM Lender additional deputy managing director Sk Moyeen Uddin, industries ministry joint secretary Ferdousi Begum, ONE Lender SME brain Kamrul Hasan, Mutual Trust Lender SME head Sanjib Kumar Dey, Primary Bank MSME brain Syed M Omar Tayub and Premier Bank EVP Mohammad Emtiaz Uddin, amongst others, spoke at the programme.