The stimulus package amounting to Tk 20 billion that the government announced in mid-April last year to bail out the pandemic-hit Cottage, Micro, Small and Medium Enterprises (CMSMEs) is yet to be fully disbursed by the scheduled banks and Non-banking Financial Institutions (NBFIs). Till the end of December last year when the local banks could disburse only 46 per cent of the total package, the Bangladesh Bank (BB) again extended the deadline for the fourth time until March this year for the banks to fulfil the target. And to facilitate work, the BB through a notice on January 24 also selected some lead banks in each district to speed up distribution of the loans to the CMSMEs.
Meanwhile, the banks and NBFIs are learnt to have disbursed Tk 130 billion, which is 65 per cent of the total stimulus package for the CMSMEs, among the targeted business entities. Evidently, the banks have repeatedly failed to meet the disbursement target despite extension of the deadline more than once. In contrast, the money allocated for the large industries has been fully utilised within the stipulated period. Why is this dichotomy? In fact, it has to do with banks' lending culture that favours the rich customers as they can produce the asked for securities against the loanable fund in the form of collateral. On the other hand, the CMSMEs, in most cases, lack such resources to provide as securities to banks to qualify for the loans. So, it is hardly surprising that the worst-hit sector of the economy, the CMSMEs, which also comprise 99.8 per cent of the entire industrial sector, could not so far reap the expected benefits from the stimulus package. And this has happened despite the fact that the government arranged the bailout measure for this sector with the best of intentions.
Recently, the government has made another move through the Bangladesh Small and Cottage Industries Corporation (BSCIC), the key agency for the sector's development, to create a database of the CMSMEs that are yet to access the stimulus money. To this end, BSCIC has sent instructions to the district level CMSME loan disbursement and monitoring committees, bodies formed in June last year, to make a database of such CMSMEs. The said loan disbursement and monitoring committees, or loan committees, in short, would then recommend the firms thus included in the database for loans from the banks. In case, a bank fails to advance loan to any such CMSMEs so recommended, it (the bank) will be required to explain its failure in this regard to the loan committee. Overall, the main objective of this arrangement is to ensure that not a single eligible unit under the listed CMSMEs in the database is outside the purview of the stimulus package.
Now, with a database in hand, it will be possible on the part of the government to reach out to all the CMSMEs that constitute 26 per cent of the economy as told by the commerce minister recently. So, it is believed that this all-out effort by the government to cover each and every eligible CMSME under its stimulus programme would finally be able to deliver the goods. Admittedly, the government's present move is a very useful, necessary and timely one to salvage a sector that is also known as the backbone of the economy.