Higher economic growth will not bear advantages for the country unless its benefits can reach out to the poor people, said Bangladesh Bank (BB) Governor Salehuddin Ahmed yesterday.
He said, "Higher GDP growth can benefit the country whenever it has redistributed support for poverty alleviation, income generation and job creation. Small and medium enterprises (SMEs) bear importance in this regard."
The governor was speaking at a SME fund disbursement programme held at the Bangladesh Bank conference room. Hua Du, country director of the Asian
Development Bank (ADB), was also present.
The BB released funds amounting to Tk 197 million as refinance to two banks and five financial institutions from the ADB, which sanctioned Tk 2.0 billion funds to allow small and medium enterprises to have credit facility.
The BB governor handed over the fund disbursement letter to the seven financial institutions' authorities.
The seven organisations are One Bank Ltd, Eastern Bank Ltd, Peoples' Leasing and Financial Services Ltd, MIDAS Financing Ltd, Industrial Development and Leasing Company of Bangladesh Ltd, Islamic Finance and Investment Ltd, Uttara Finance and Investments Ltd.
The fund was disbursed from the ADB-supported US$ 50 million worth Small and Medium Enterprise Sector Development Programme (SMESDP). Under the programme, the BB received Tk 2 billion to disburse credits to the banks and financial institutions for their loans to the SMEs.
A total of 18 financial institutions, including nine banks, signed agreements with the BB for the refinance facility from the ADB-supported fund.
The BB governor said SME is very important sector in terms of income generation, poverty alleviation and job creation. It is also important for a sustainable economic growth, he added.
He, however, said although as sustainable economic growth is important for the entire economy but it has to be reached out to the poor people.
He urged the concerned banks and financial institutions to take initiative to disburse the fund rapidly to the people. He also warned the financial institutions against the misuse of the fund saying that, "We should be very careful so that the fund can be reached out to the real SME entrepreneurs."
ADB Country Director Hua Du said the ADB is committed to encouraging growth of the SMEs. She expressed dismay over the slower disbursement of the fund, which, she said, the ADB approved two years back.
She said, "More attention should be paid to the light engineering sector which is one of the emerging sectors of Bangladesh."
Meanwhile, BB had in 2005 formed a Small Enterprise Fund (SEF) worth Tk 1 billion to provide refinance facility to the banks and financial institutions against their supplied credits to the small and medium enterprises. Later, the World Bank provided Tk 700 million to the SEF.
