Bangladesh Bank has formed a special refinancing fund of Tk 1000 crore for the development of rural and local industries of the country. Entrepreneurs will get loan facility at maximum 5 percent interest from this fund. The central bank has issued a circular in this regard on Monday.
According to the circular, a green transformation fund of Tk 5000 crore has been formed to increase the pace of sustainable growth in export and production-oriented industries to establish an environment-friendly and sustainable economy in the country. From this fund, eligible customers have the facility of refinancing capital equipment and parts in domestic currency
against the bank’s financing after payment of import price. It is necessary to ensure the sustainability of rural and local industries while ensuring sustainable growth in export and manufacturing industries. For this purpose, it has been decided to provide re-financing facilities to rural and local industries of Tk 1000 crore from the said fund.
Bangladesh Bank said that this fund has been formed for the purpose of providing this financing to various sectors including renewable energy, increasing energy efficiency, water conservation and management, waste management, recycling activities and improving the working environment.
According to the circular, the maximum interest rate on loans at the customer level has been fixed at 5 percent. On the other hand, the participating banks will get refinancing facility from Bangladesh Bank at only 1 percent interest. According to the type of project, the duration of the loan will be 2 to 5 years and there will be grace period facility up to a maximum of 6 months.
A borrower can take a maximum loan of up to 5 crore rupees under this fund. A maximum of 80 percent of the total import or purchase price can be financed.
Apart from this, the central bank has also set an important condition for taking loans. At least 10 percent of the total electricity used in the respective projects should be procured from renewable energy, such as solar power. However, the defaulting person or organization will not get any benefit under this fund.
All state-owned banks can disburse loans under this fund. However, in the case of private and foreign banks, the rate of defaulted loans should be below 20 percent. Banks which have already completed participation agreement with Bangladesh Bank under Green Transformation Fund, will not need to sign a new agreement.