SME Foundation, Prime Bank sign deal to boost CMSME growth

Prime Bank PLC has signed a refinancing agreement with SME Foundation aimed at enhancing credit access for cottage, micro, small, and medium enterprises (CMSMEs).

This collaboration operates under the government’s Tk 300 crore revolving fund and follows credit wholesaling guidelines designed to stimulate economic growth at the grassroots level.

M Nazeem A Choudhury, additional managing director of Prime Bank PLC, and Anwar Hossain Chowdhury, managing director of SME Foundation, signed the agreement in Dhaka recently, according to a press release.

They emphasised that this strategic alignment will not only create jobs but also strengthen the overall resilience of the CMSME sector in Bangladesh.

Khandakar Abdul Muktadir, minister for industries, commerce, textiles, and jute, attended the programme as the chief guest and highlighted the government’s commitment to fostering a business-friendly environment for small-scale entrepreneurs.

Under the agreement, Prime Bank will facilitate low-cost loans to eligible entrepreneurs, with the maximum interest rate capped at 8 percent per annum. The financing facility is designed to be highly accessible, offering loan amounts ranging from Tk 1 lakh to Tk 25 lakh, depending on the nature of the enterprise.

To further ease the burden on small business owners, the programme provides a flexible repayment period of up to four years, including a six-month grace period to allow businesses sufficient time to generate returns before beginning their monthly instalments.

A core focus of this initiative is the promotion of financial inclusion and social equity. The agreement mandates that a significant portion of the funds be allocated to women entrepreneurs and those operating within specific industrial clusters.

Additionally, the programme prioritises young innovators in the ICT sector, manufacturers of import-substituting goods, and entrepreneurs located in climate-vulnerable or underprivileged regions.

By removing the requirement for formal collateral for loans up to Tk 10 lakh, the partnership ensures that even those without substantial assets can secure the capital necessary to grow their ventures.

The leadership of both SME Foundation and Prime Bank expressed optimism about the impact of this fund on the national economy. Beyond lending, the programme aims to support sustainable industrialisation by encouraging green technologies and helping returning migrants reintegrate into the productive workforce.