Action Plan JICA Training

OSIC, OSAKA, Japan23 June 2010

Action Plan: Facilitated Lending ModuleAction Plan: Facilitated Lending Module

ALAM Md. AshrafulBangladesh

JICA Training on Fin. & Tech. Support for SMEs

Problem: Current Financing System

Abbreviations:1. GOB – Government of Bangladesh 2. MOF – Ministry of Finance 3. EEF – Equity & entrepreneurship Fund

4. BB – Bangladesh Bank 5. AI – Agro processing industries6. SCB – State owned commercial banks7. SB – Specialized banks 8. PCB – private commercial banks 9. NBFI – Non banking Financial

Institutions

Funding Mode: Government FundInterest rate for the Bank : Bank rate [5%]Interest rate for the SMEs : Market based

[16%- 22%]Collateral & Guarantee : YesPreference : Manufacturing and service sectorSME access to finance: limitedTotal to SME loan outstanding % : 19% [2009]

Legend:Government FundBank’s own Fund

GOB [MOF]

BB Fund

ADB Fund AI FundIDA Fund JICA Fund [p]

PCBsPCBs Foreign Banks

Foreign Banks

NBFINBFISCBSCB

SMEs

SBSB

EEF

Bangladesh Bank

[The Central Bank]

Equity Fund

Public sector Banks

Public sector Banks

Objectives of new action plan

• Greater access to finance by the SMEs– Long term • SME development policy & promotion law– Initiatives for a comprehensive SME development policy– Initiatives /proposal for enactment of SME promotion law

– Medium term• Facilitated lending module– Introduction of Business Plan Certification System [BPCS}– Credit Guarantee Trust for Small Enterprises– Certified SME consultant system [Managerial & Technical

support] – Short term

• Introduction of Business Plan Certification System [BPCS}• Introduction of Certified SME consultant system

Facilitated Lending Module

Abbreviations:GIC –General insurance Corporation[public

corporation]CGT[SE] – Credit Guarantee Trust small enterpriseBPCC – Business Plan Certification Committee

BPCC composition:1. University professor [Business/

economics/Technical] 2. Sector specialist 3. Government Representative

[MOI]4. Fund Manager’s

Representative5. SME Foundation

Representative6. Chamber of Commerce &

Industries Representative7. CGT representative

Legend:Fund flow :Certification process :Credit flow :Guarantee flow :Support :

GovernmentSME Fund

Banks & FIs

SMEs

BPCC

CGT[SE]Guarantee

GIC[Credit

insurance]

Government of

Bangladesh

BangladeshBank

Stakeholders

Action Plan Implementation Sequence