Small and medium entrepreneurs’ loan from banks and non-bank financial institutions declined by 6.01 per cent or Tk 7,391.28 crore in January-September period of the year 2018 compared with that in the same period of the year 2017.
As per a recently released central bank report, banks and NBFIs disbursed Tk 1,15,654.85 crore in loans to the SME sector in nine months of the year 2018, while the figure was Tk 1,23,046.13 crore in the same period of the year 2017.
Bangladesh Bank officials said that banks and NBFIs might have reduced lending fund to the SME sector mainly because of the liquidity crisis that surfaced from January this year.
Beside, adjustment of advance-deposit ratio following the imposition of new ratio by the central bank in January this year might be another reason for the reduced lending by the banks to the SME sector, they said.
They, however, said that the figure might increase gradually depending on the liquidity situation at the banks.
The BB on January 30 reduced the advance loan-deposit ratio for conventional banks to 83.5 per cent from 85 per cent and IDR (income-deposit ratio) for Islamic banks to 89 per cent from 90 per cent and the entities are supposed to adjust the ratio by March, 2019.
The issue of banks and NBFIs liquidity crisis was reflected in the overall loan disbursement in the private sector.
Last year in December, private sector credit growth dropped to a 39 months low at 13.2 per cent.
During the July-September quarter, 2018, banks and NBFIs disbursed Tk 36,913.26 crore to the SMEs while the figure was Tk 39,539.39 crore in the same period in the previous year.
Although SME loan disbursement to the service and manufacturing sectors increased in January-September period of the year 2018, loans to entrepreneurs associated with the trade sector fell sharply by 33.95 per cent or Tk 26,387 crore.
In January-September of the year, SME loans to entrepreneurs associated with the trade sector declined to Tk 51,330.34 crore while the figure was Tk 77,718.14 crore in the same quarter in 2017.
The number of beneficiary entrepreneurs also fell by 8.24 per cent to 5,12,540 in the period of 2018 from 5,58,566 a year ago.
Manufacturing sector received Tk 37,993.25 crore in nine months of the year against Tk 29,557.18 crore in the same period in the previous year.
In January-September, the entities disbursed Tk 26,331.26 crore to the service sector, whereas the loan disbursement figure was Tk 15,770.81 crore in January-September last year.