SME Foundation, Prime Bank sign agreement to boost CMSME growth with low-interest, collateral-free loans

SME Foundation and Prime Bank have officially entered into a refinancing agreement aimed at enhancing credit access for Cottage, Micro, Small, and Medium Enterprises (CMSMEs).

This collaboration operates under the government’s BDT 300 crore Revolving Fund and follows the Credit Wholesaling guidelines designed to stimulate economic growth at the grassroots level, according to a media release. 

The formal signing took place in Dhaka recently in the presence of the Minister for Industries, Commerce, and Textiles & Jute, Khandaker Abdul Muktadir, who highlighted the government’s commitment to fostering a business-friendly environment for small-scale entrepreneurs.

Under this agreement, Prime Bank will facilitate low-cost loans to eligible entrepreneurs with a maximum interest rate capped at 8% per annum. The financing facility is designed to be highly accessible, offering loan amounts ranging from BDT 1 Lac to as much as BDT 25 Lac depending on the nature of the enterprise. To further ease the burden on small business owners, the program provides a flexible repayment window of up to four years, which includes a six-month grace period to allow businesses sufficient time to generate returns before beginning their monthly installments.

Prime Bank’s Additional Managing Director, M. Nazeem A. Choudhry, and SME Foundation’s Managing Director, Anwar Hossain Chowdhury, emphasized that this strategic alignment will not only create jobs but also strengthen the overall resilience of the CMSME sector in Bangladesh, the release adds.