BB will cover 80% of the guarantee against loans in default of micro-account holders

To this end, the central bank has launched a new credit guarantee scheme

TBS Report

January 23, 2022, 10:30 p.m.

Last modification: January 23, 2022, 10:33 p.m.

Bangladesh Bank file photo: Salahuddin Ahmed/TBS

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Bangladesh Bank file photo: Salahuddin Ahmed/TBS

Bangladesh Bank will cover 80% collateral against defaulted loans of individual micro account holders, who have opened accounts with TK10-100, under its Tk 500 crore refinancing scheme, with the aim of reduce lender risk and boost small scale unsecured loan disbursement amid the Covid-19 pandemic.

The central bank issued a circular in this regard on Sunday, in which it said that the relevant lender should pay the remaining 20%.

To pay the guaranteed money, the Bangladesh Bank has launched a credit guarantee program called “Financial Service-Inclusion”, the circular says, adding that the program will cover the highest 30% of defaulted loans from certain financial institutions. participants.

Lenders interested in the scheme must sign agreements with the central bank’s credit guarantee scheme unit. Participating financial institutions that already have the transactions can also benefit from the facility.

The circular indicates that the initial loan periods will be counted for the guarantee facility. In case of delay in loan repayment, lenders have to pay late fees for the secured money.

Earlier, in September last year, the central bank set up a TK 500 crore fund to facilitate borrowing for micro account holders to help them survive in the pandemic. Borrowers benefited from loans granted under the fund at an interest rate of 7% for up to three years.

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