The Bangladesh Bank has announced a reduction in fees for credit guarantee facilities aimed at cottage, micro, small, and medium enterprises (CMSMEs) and the financial inclusion sector.
A recent circular from the central bank details that participating banks or financial institutions must pay a guarantee fee of 0.50% for the first year of the loan. For subsequent years, the fee has been reduced to 0.25% from the previous 0.75% per year, contingent on the validity of the guarantee.
This move is intended to make credit guarantee facilities more affordable and accessible to entrepreneurs, according to the circular. The reduction follows the initial 0.75% fee set by the central bank on November 8 of last year.
The central bank underscored the significance of the CMSME sector, noting its contributions to economic growth, reduction of rich-poor and regional disparities, and promotion of inclusive development, including the empowerment of women.
