Small entrepreneurs can obtain loans at an interest rate of just 7% through United Commercial Bank PLC (UCB). UCB has signed an agreement with Bangladesh Bank to expand easy-term, low-interest financing for cottage, micro, small, and medium enterprises (CMSMEs) across the country,  a press release said.

Bangladesh Bank provides refinancing under a special loan facility called the Cluster Financing Scheme.   

The agreement was signed at a recent ceremony held at the Bangladesh Bank headquarters. Nawshad Mustafa, Director of the SME and Special Programs Department (SPD) of Bangladesh Bank, and Nabil Mustafizur Rahman, Additional Managing Director of UCB, exchanged the agreement documents on behalf of their respective organizations.

The priority CMSME clusters covered under the scheme include agro/food processing, agricultural machinery manufacturing, ready-made garments, knitwear, design and decoration, ICT, leather and leather goods, light engineering, and jute and jute products.

Other eligible sectors include plastics and other synthetic industries, tourism, home textiles, renewable energy (solar power), automobile manufacturing and repair, handloom, handicrafts and cottage industries, energy-efficient equipment (including LED and CFL bulb manufacturing), electronics manufacturing and electronic materials development, jewellery, toys, cosmetics and toiletries, agarwood products, furniture, and mobile/computer/television servicing.

The loan limit will be determined in accordance with Bangladesh Bank’s SME definition. Both working capital and term loans will be available. The tenure will be one year for working capital loans and two to five years for term loans. The maximum lending rate for end borrowers will be 7 percent.

The initiative is expected to enable CMSME entrepreneurs to access affordable financing more easily. It will also strengthen cluster-based industries and businesses, contributing to sustainable economic growth and the creation of new employment opportunities.

Bangladesh Bank Deputy Governor Nurun Nahar attended the signing ceremony. Also present were Md. Ridwanul Haque, Deputy Managing Director and Head of Distribution and Strategy at UCB; Mohammad Selim Chowdhury, Head of SME; and senior officials from Bangladesh Bank and UCB.