Bangladesh Bank announces Tk 5bn lending scheme for village returnees

Bangladesh Bank has announced a Tk 5 billion refinancing fund for people who were forced to return to villages after losing their jobs and businesses as a result of the coronavirus pandemic.

Collateral-free loans of up to Tk 500,000 will be disbursed from the fund for a period of three years, with the aim of creating employment opportunities for those affected by the pandemic and lifting them out of poverty.

The interest rate on the loans has been capped at 6 percent, the central bank said in a notice on Monday.

Borrowers will be able to pay back loans of upto Tk 200,000 in instalments over two years, with a grace period of three months. Loans of up to Tk 500,000 can be repaid in three years, with a grace period of six months.

State, commercial and specialised banks will be able to disburse loans from the fund after signing an agreement with the central bank.

Private and foreign banks also have the opportunity to join the programme and hand out loans from the fund.

Islamic banks will be able to conduct investment activities under the scheme in line with Shariah principles.

Banks have also been directed to earmark at least 10 percent of the funds for loans and investments for women.