The Bangladesh Bank has introduced a Tk 5,000 crore refinancing scheme tailored specifically for cottage, micro, small, and medium enterprises (CMSMEs). The strategic initiative aims to bridge critical working capital gaps and stimulate broader economic growth within a sector widely regarded as a primary engine of the national economy.
According to a policy circular distributed by the central bank, the financial package caps the maximum interest rate for end borrowers at 9%. The revolving fund is financed utilizing surplus liquidity drawn from scheduled commercial banks and will be directly overseen by the central bank administration.
Key Terms and Financial Structure
The scheme is structured to operate for an initial term of three years. Because it is established as a revolving fund, amounts recovered from maturing loans can be reallocated to new applicants, ensuring sustained operational longevity for the programme.
| Parameter | Framework Condition |
| Total Fund Allocation | Tk 5,000 crore |
| Central Bank Refinancing Rate to Commercial Banks | 4% |
| Maximum Lending Rate for End Borrowers | 9% |
| Initial Programme Duration | 3 years (Revolving) |
| Borrower Grace Period | 3 to 6 months |
The central bank confirmed that Islamic banking institutions are fully eligible to participate in the initiative. These institutions may extend funding through Shariah-compliant financing mechanisms that conform to their established regulatory frameworks. Furthermore, the central bank policy explicitly prohibits participating banks from imposing any auxiliary charges, administrative fees, or commissions beyond those sanctioned under current financial regulations.
Target Eligibility and Credit Restrictions
The refinancing facility is targeted at operational CMSMEs whose manufacturing or service capacities are constrained by a deficit of working capital.
Existing Borrowers: Enterprises possessing active working capital loans via alternate credit lines remain eligible to apply, provided they comply with prevailing banking rules and maximum exposure limits.
Defaulter Exclusion: In compliance with strict risk-mitigation guidelines, any individual or corporate entity registered as a loan defaulter within the central bank’s Credit Information Bureau (CIB) database is strictly disqualified from accessing the scheme.
Borrowers who successfully secure funding under the initiative will benefit from an integrated grace period of between three and six months before repayments commence.
Bank Participation and Allocation Priorities
While the programme is accessible to all scheduled commercial banks operating nationwide, the central bank intends to apply specific priority criteria during the asset allocation process. Financial institutions maintaining an Advance-Deposit Ratio (ADR) higher than 70% will be granted preferential access to the refinancing pool.
To formalize their involvement, interested financial institutions must execute a mandatory Participation Agreement with the SME and Special Programmes Department of the Bangladesh Bank.
Although participating banks are permitted to request additional collateral from applicants where deemed necessary, the central bank has clarified that the full legal and financial responsibility for loan recovery rests entirely with the individual commercial banks. Through this comprehensive framework, the regulatory authority intends to bolster the structural capacity of local entrepreneurs and inject fresh momentum into domestic market activities.