Refinancing Scheme in Bangladesh: A Comprehensive Guide Based on Bangladesh Bank Guidelines

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Learn how Bangladesh Bank’s refinancing schemes support SMEs, women entrepreneurs, agriculture, and green finance. Get complete insights with updated guidelines and benefits.

Introduction

Refinancing schemes play a pivotal role in promoting inclusive growth and financial support for priority sectors in Bangladesh. The Bangladesh Bank (BB) has introduced various refinancing schemes that provide low-cost funds to commercial banks and financial institutions for lending to target groups such as SMEs, women entrepreneurs, the agriculture sector, and green industries.

What is a Refinancing Scheme?

A refinancing scheme refers to the provision of funds by Bangladesh Bank to commercial banks and non-bank financial institutions at concessional rates. These banks then lend the funds to eligible borrowers under specific terms and conditions set by the central bank.

Key Objectives of Refinancing Schemes by Bangladesh Bank:

• Boost financial inclusion
• Support women entrepreneurship
• Promote green and sustainable industries
• Facilitate agricultural development
• Provide post-COVID-19 economic stimulus

Main Features of BB Refinancing Schemes:

Targeted Lending Areas:

• Small and Medium Enterprises (SMEs)
• Women-led businesses
• Agriculture and agro-based industries
• Renewable energy and green technologies
• Export-oriented sectors

Interest Rate Structure:

• Bangladesh Bank provides funds at 1% to 5% interest to banks
• Banks can lend to borrowers at 4% to 9%, depending on the scheme

Loan Tenure:

• Short-Term: Up to 1 year
• Mid-Term: 1 to 3 years
• Long-Term: More than 3 years

Bank Responsibilities:

• Proper scrutiny of loan applications
• Transparent disbursement of funds
• Regular reporting to Bangladesh Bank

Popular Refinancing Schemes Under Bangladesh Bank:

• Tk 25,000 Crore SME Refinancing Scheme
• Green Transformation Fund (GTF)
• Agricultural Refinance Scheme
• Refinancing Scheme for Women Entrepreneurs
• Post-COVID-19 Stimulus Refinance Programs

Who Benefits from These Schemes?

• Small and medium-sized business owners
• Female entrepreneurs
• Environment-friendly projects and startups
• Farmers and agro-business entrepreneurs
• Businesses affected by COVID-19

How to Apply for a Refinancing Loan?

1. Approach a scheduled bank that participates in refinancing schemes
2. Submit a business/project proposal that aligns with the scheme objectives
3. Comply with the eligibility criteria and documentation requirements
4. Upon approval, receive the loan at subsidized interest rates

Conclusion

Bangladesh Bank’s refinancing schemes are designed to foster sustainable development, create employment, and empower entrepreneurs. If properly utilized, these schemes can drive inclusive economic growth across the country.

Call to Action

Have you or someone you know benefitted from a refinancing scheme? Share your experience in the comments below!

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