Circular No. 01 dated 18 January 2023 issued by the SME and Special Programs Department of Bangladesh Bank on “The Disbursement of Working Capital Loans under the BDT25,000 Crores Refinancing Scheme for Cottage, Micro, Small & Medium Enterprises (“CMSMEs”)”

Bangladesh Bank has issued further guidelines on its BDT25,000 crores refinancing scheme that was introduced in July 2022 to support CMSMEs. The scheme allows for banks and financial institutions to receive funds at 2% interest for lending to CMSMEs at up to 7% interest.

Since its inception, Bangladesh Bank noticed that some banks and financial institutions are giving loans for more than 12 months, which is a violation of the policy. To prevent this kind of violation, Bangladesh Bank has issued this circular specifying that loans can only be given for a maximum period of 12 months, although they can be renewed upon an application to Bangladesh Bank.