Bangladesh Bank Governor Dr Atiur Rahman, and Chief Representative of JICA Bangladesh Office Dr. Takao Toda seen at an agreement signing ceremony at the BB office in Dhaka Monday.

Bangladesh Bank (BB) on Monday opened a Tk 5 billion fund to provide financing facilities to the country's small and medium enterprises (SMEs).

Under the two-step fund, provided by Japan International Cooperation Agency (JICA), 41 banks and financial institutions (FIs) will be provided with re-finance or pre-finance for lending to SMEs.

The fund will be disbursed to the participatory Banks and FIs at a maximum interest rate of 5 percent for medium (2-year) and long term (8-year) period. The Banks and FIs may charge the market rate in case of lending.

BB has signed separate agreements with 22 participatory banks and 19 FIs to this effect.

BB Governor Dr Atiur Rahman and Chief Representative of JICA Bangladesh Office Dr. Takao Toda were present while the deals were signed during a function at BB headquarters on Monday.

While speaking at the function, Dr Atiur said the central bank has identified that there is a huge gap in the country’s financial market for the SMEs to get for mid-term and long-term funding for investment in technology and other productive areas.

Bangladesh Bank signed an agreement with JICA in 2010 for a fund worth 5000 million Japanese Yen as Overseas Development Assistance (ODA). Of the total fund, JICA has released 1000 million Yen (Tk 1 billion) in March this year, the BB governor informed the function.

He said the fund aims to develop a medium to long-term credit market to support the SMEs to meet their investment requirements.

JICA chief represen-tative in Bangladesh Takao Toda observed that Bangladesh would be able to create more job opportunities by financing the SME sector, which also has a huge potential to grow further like those in other Asian countries.

The Daily Sun/Bangladesh/ 12th June 2012