Set a specific interest rate for SMEs

Md Ahsan-uz Zaman, Managing Director & CEO, Midland Bank

Midland Bank has been committed to inclusive banking since its inception. It places great importance on the SME sector and continually strives to increase credit flow to SMEs under the policies, guidelines, and circulars issued by Bangladesh Bank. We have centralised the SME division since its inception to ensure the availability of SME loans.

Midland Bank provides SME loans through its branches, sub-branches, and agent banking centres under the direct supervision of the Retail Distribution Division. Moreover, we have a linkage financing programme via NGOs to reach SMEs in rural and hard-to-reach areas.

To better support SMEs, we believe it's important to enrich the centralized SME and branch teams by recruiting experienced human resources with expertise in SMEs. We also need to utilize digital platforms for both loan disbursement and deposit collection. We should focus more on cluster-based financing and introduce SME service centers to address the various needs of our clientele.

We also need to utilize digital platforms for both loan disbursement and deposit collection. We should focus more on cluster-based financing and introduce SME service centers to address the various needs of our clientele.

Scopes for these refinance or pre-finance schemes could be increased to facilitate more SMEs. Bangladesh Bank could introduce a specific interest rate for SMEs. A detailed guideline should be introduced by Bangladesh Bank regarding collateral security against SME financing. The licensing process of various government agencies to establish a new industry under SMEs should be simplified, introducing a one-stop service for them. Organising adequate training under the direct supervision of Bangladesh Bank or other regulatory bodies to enlarge the capacity of SME entrepreneurs will help skill and capacity development. Extending more emphasis on vocational education and encouraging our students to become entrepreneurs will help develop the sector further.

To boost the sector further, special training facilities should be arranged for SMEs under the supervision of Bangladesh Bank. There should be a specific VAT policy for small industries to strengthen their footprint in the market. The SME Master Policy should be revised, taking the impacts of inflation into account. The licensing process in various government agencies to establish a new small/medium business should be simplified with a one-stop service.