Home Today's Paper Most Popular Video Gallery Photo Gallery
Subscription Blog Signin Register
Logo
Monday, November 6, 2017 11:22:04 PM
Follow Us On: Facebook Twitter Twitter Twitter Twitter

Attempt to misuse SME loans must be checked

By
07th-Nov-2017       
Comments
Share your thought
Post a comment »
Read all () »

THIRTEEN banks have exceeded their annual SME loan disbursement targets in just six months; which seems to be suspicious in the eyes of the central bank. They disbursed 105 percent to 242 percent of their annual targets in January-June period of this year. It is good that the banks have disbursed a hefty amount of loans to small and medium enterprises but the central bank should keep watch on these banks to see if they showed other credits as SME loans. Moreover many remain skeptical whether such credit is being used as cover to grabbing loans by influential people closer to power corridor.

It needs extra care when default loans in the SME sector have increased by more than eight times in the last seven years. In 2016, Tk 22,494 crore out of the Tk 136,176 crore disbursed became defaulted; the amount of such default loans was only Tk 2,644 crore in 2010. The commercial banks should restraint the rise in suspicious banking to arrest the rising trend of default loan in the SME sector. For example, Exim Bank's disbursment target for the entire year was Tk 5,375 crore but it has already disbursed Tk 5,666 crore or 105 percent of the target in six months. Meghna Bank disbursed 200 percent of its annual SME lending target of Tk 265 crore in the period while NCC Bank achieved 242 percent of its target of Tk 900 crore.

Likewise Trust Bank has disbursed 115 percent of the target of Tk 600 crore and NRB Commercial Bank achieved 205 percent of its target of Tk 250 crore. The nine other banks that overshot their SME loan targets are Bank Al-Falah, Citibank NA, State Bank of India, Woori Bank, Modhumoti Bank, NRB Bank, City Bank, Bank Asia and Exim Bank.

On the other hand, 19 banks, including eight state-run lenders, could not reach even 50 percent of their SME loan disbursement targets in the first half of the year. Together, banks and non-bank financial institutions (NBFIs) lent 62 percent of their yearly SME loan target of Tk 133,854 crore in the first six months. The BB sat with banks and non-bank financial institutions in separate meetings between October 9 and 11 and asked them not to disburse loans excessively in the trading sector. Banks and NBFIs were also asked not to disburse more than 55 percent of their SME loans to the trading sector in a single year.  The central bank will not consider any loans exceeding the 55 percent threshold as SME credit.

SME financing does not contribute much to banks' profit but banks will have to concentrate more lending to small and medium enterprises which may grow as big business in future. But more such loans must not go to trading, the focus should be on productivity sector to produce new goods and create more jobs. In our view the central bank must strengthen monitoring to avoid fake loans under the SME cover.


Tariff
Add Rate

News Archive

Inside The New Nation

Editorial »

CPA meeting must bring pressure on Myanmar to take back Rohingyas


THE two-day Commonwealth Parliamentary Association (CPA) opens in the city yesterday at a time when Bangladesh is facing the exodus of Rohingya refugees from Myanmar's Rakhine State There are many routine items for discussion in this conference by the parliamentarians. More than 550 delegates from 144 National and Provincial parliaments ...

International »

Thousands urge peace in anti-Trump protest in S. Korea


AFP, Seoul  :Thousands of South Koreans protested Sunday against an upcoming visit by Donald Trump and called for peace as the US President begins an Asian tour dominated by North Korea's nuclear programme.Trump, who arrived in Tokyo on Sunday, is set to visit the South from Tuesday to Wednesday as ...

Cricket »

A good number of spectators came at the gallery of Sylhet International Cricket Stadium in Sylhet to watch the match of the AKS Bangladesh Premier League Twenty20 Cricket between Sylhet Sixers and Comilla Victorians on Sunday.


Entertainment »

Sunny Leone takes boldness to the next level


We all know about the boldness of this femme fatale. She oozes sex appeal like no one has ever done in the film industry. Even her name is synonymous with glamour and seduction. The movies she has featured in are quite bold and she does not really shy away from ...

Entertainment »

Kriti Sanon’s dedication to her idol, Madhuri Dixit


Bareilly Ki Barfi actress, Kriti Sanon recently got dressed up as her idol, Madhuri Dixit for a television show where she performed to her popular song, Ek Do Teen. She took to Instagram and posted a boomerang doing the hook step of the song and also wrote about how her ...

City »

Justices of the Appellate Division of the Supreme Court led by Acting Chief Justice Abdul Wahab Miah called on President Abdul Hamid at Bangabhaban on Sunday.


Editorial »

Food inflation is real, denial won`t do


FOOD inflation is running all time high in the country as average quality rice sells now at Tk 65 per kg compared to around Tk 40 two months back. Vegetable is also selling at twice the price now from two months back. For example, onion now sells Tk 80-85 per ...

Sports »

Julien Benneteau of France returns the ball to Marin Cilic of Croatia during their quarterfinal match of the Paris Masters tennis tournament at the Bercy Arena in Paris, France on Friday.


Sports »

Wang Shiyue (left) and Liu Xinyu of China compete in the Ice Dance Free Dance during the Audi Cup of China ISU Grand Prix of Figure Skating 2017 at the Capital Gymnasium in Beijing on Saturday.


Entertainment »

Sunny Leone to star in `Dabangg 3`


'Why would she be a Munni, we can cast her for something different, but for that, we have to finalise something'After Malaika Arora's sizzling performance in the item song, "Munni Badnaam Hui" from Salman Khan starrer "Dabangg, and its sequel with Kareena Kapoor Khan's rocking presence in "Fevicol Se" from ...

City »

BNP Standing Committee Member Barrister Moudud Ahmed speaking at a discussion organised by Jatiyatabadi Ganotantrik Andolon on its 4th founding anniversary at the Jatiya Press Club on Saturday.


Football »

Vitoria`s Marcos Valente jumps for the ball with Marseille's Florian Thauvin, left, during the Europa League group I soccer match between Vitoria SC and Olympique de Marseille at the D. Afonso Henriques stadium in Guimaraes, Portugal on Thursday.


.

Editorial »

Politics of violence and impunity created a climate of easy crime


CENTERING marital dispute a father and his daughter were killed in the city's Badda locality after 12 hours into the murder of a mother and her son in another incident in Kakrail area of the metropolis. Media is flooded every day with news on murder, kidnapping and such other deaths ...

Entertainment »

Rakul Preet takes a detox break with her mom


Rakul Preet is all set to star opposite Sidharth Malhotra in Aiyaary. Soon after the last schedule of the film wrapped up, the actress took off on a short break, far away from the hustle-bustle of the city. Rakul jetted off to a resort in Vizag for a week-long detox ...

City »

Bangladesh Mess Organisation formed a human chain in front of the Jatiya Press Club on Friday with a call to normalize mess rent.


.

 
Items that you save may be read at any time on your computer, iPad, iPhone or Android devices.
 
Are you new to our website? Do you have already an account at our website?
Create An Account Log in here
Email this news to a friend or like someone
Email:
Write a comment to this news