CMSME Refinance Scheme

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Cottage, Micro, Small and Medium Enterprises (CMSMEs) are considered as a potential sector for resolving unemployment problem. This sector has been playing a significant role for achieving economic growth and earning foreign currency by encouraging and expanding the business activities. With a view to enhancing the living standard of the mass people, to ensure women empowerment along with reducing gender discrimination for the development of this sector.

The specific details of any refinance scheme offered by the Bangladesh Bank can vary depending on the prevailing economic conditions, government priorities, and the needs of the targeted sectors. These schemes may include provisions for subsidized interest rates, flexible repayment terms, and other incentives designed to encourage borrowing and investment in priority areas.

Here are some key types of CMSME Refinance Schemes:

  1. Small Enterprise Refinance Scheme for Women Entrepreneurs
  2. Setting up Agro Based Product Processing Industries Refinance Scheme
  3. New Entrepreneurs' in Cottage, Micro and Small Enterprise Sector.
  4. Shariah Based financing in 'Agro-Based Industry', Small Entrepreneurs' (Including Women Entrepreneur) and New Entrepreneurs' in Cottage, Micro & Small Enterprise Sector.

The CMSME (Cottage, Micro, Small, and Medium Enterprises) Refinance Scheme in Bangladesh offers several facilities aimed at providing financial support to these sectors. Here are the key features and facilities of the CMSME Refinance Scheme:

  1. Total amount of fund: As in Bangladesh Bank's Circular
  2. Loan Allocation and Fund Distribution:

    Banks and financial institutions are mandated to distribute

    1. Manufacturing and Services Vs Business:
      1. Manufacturing and services sectors at least 70%
      2. Business sector with a maximum of 30%
    2. CMS Enterprise Vs Medium Enterprise:
      1. Cottage, micro, and small entrepreneurs minimum of 75%
      2. Medium enterprises with the remaining 25%

      Figure can vary depending on Bangladesh updated Bank's circular from time to time

  3. Loan Profile:

    • Interest Rate: Interest rate at 7% (In case of women entrepreneur it may vary).
    • Loan Tenure: The total loan tenure, including the grace period, can extend up to 5 (five) years.
    • Grace Period: A grace period of up to six months for the borrowers.
  4. Special Considerations:

    • Defaulting Borrowers: Borrowers with a history of default are not eligible to receive loans under this scheme.
    • Women Entrepreneurs and Special Needs: Loans under this scheme give priority to women entrepreneurs, entrepreneurs with special needs, and those affected by disasters.

High priority sector

  1. 1. Agriculture/food processing and agricultural machinery manufacturing industries
  2. 2. Ready made garment industry
  3. 3. ICT/Software Industry
  4. 4. pharmaceutical industry
  5. 5. Leather and Leather Products Industry
  6. 6. Light engineering industry
  7. 7. Jute and jute industries

Priority sectors

  1. 1. Plastic industry
  2. 2. Foreign employment
  3. 3. Shipbuilding industry
  4. 4. Environmentally friendly ship recycling industry
  5. 5. tourism industry
  6. 6. Frozen Fisheries Industry
  7. 7. Home textile goods industry
  8. 8. Renewable Energy (Solar Power, Wind Mill)
  9. 9. Active Pharmaceutical Ingredient Industry and Radio Pharmaceutical Industry
  10. 10. Herbal medicine industry
  11. 11. Radioactive (irradiation) application industries (eg quality improvement of degradable polymers/food-grain preservation/medical equipment sterilization industries)
  12. 12. Polymer manufacturing industry
  13. 13. Hospitals and clinics
  14. 14. Automobile manufacturing and repair industry
  15. 15. Handicrafts and handicrafts
  16. 16. Energy Saving Appliances (LED, CFL Bulbs Manufacturing)/ Electronic Equipment Manufacturing Industry/ Electronic Materials Development
  17. 17. tea industry
  18. 18. Seed industry
  19. 19. Jewellery
  20. 20. toys
  21. 21. Cosmetics and Toiletries
  22. 22. Agar industry
  23. 23. Furniture industry
  24. 24 Cement industry

List of agro-based activities and Agro-products/Food processing industries

  1. 1.Processed fruit foods (jams, jellies, juices, pickles, sherbets, syrups, sauces etc.)
  2. 2. Processing of fruits (tomato, mango, guava, sugarcane, jackfruit, litchi, pineapple, coconut etc.), vegetables, pulses
  3. 3. Processing of Bread and Biscuits, Semai, Lachcha, Chanachur, Noodles etc
  4. 4. Preparation of rice, flour, flour, semolina
  5. 5. Automatic Rice Mill (Auto Rice Mill)
  6. 6. Mushroom and Spirulina (Spirulina) processing
  7. 7. Production of starch, glucose, dextrose and other starch products, corn processing
  8. 8. Dairy processing (milk pasteurization, milk powder, ice cream, Condensed milk, sweets, cheese, butter, ghee, chocolate, curd etc.)
  9. 9. Production of processed foods (chips, potatoes, flakes, starch etc.) from potatoes
  10. 10. Production of various powdered spices
  11. 11. Edible oil refining and hydrogenation
  12. 12. Salt processing
  13. 13. Processing and freezing of shrimp and other fish
  14. 14. Preparation of herbal and herbal cosmetics (Cosmetics).
  15. 15. Preparation of Unani Ayurvedic medicine
  16. 16. Preparation of balanced feed for poultry and livestock and fish
  17. 17. Seed production, research, processing and storage
  18. 18. Manufacture of jute products (eg rope, yarn, twine, mats, bags, carpets, jute sandals etc.)
  19. 19. Manufacture of silk textiles and textiles
  20. 20. Agricultural machinery manufacturing industry
  21. 21. Preparation of Muri, Chira, Khai etc
  22. 22. Aromatic rice production
  23. 23. Tea processing
  24. 24. Preparation of coconut oil (if copra collected from indigenous coconuts is used)
  25. 25. Rubber Tape, Lakshma Processing
  26. 26. Cold Storage (Processing and Storage of Farmers Produced Food Potatoes and Seed Potatoes, Fruits, Vegetables)
  27. 27. Manufacture/manufacture of wood, bamboo and rattan furniture (except cottage industries) and manufacture of coppersmith's tools
  28. 28. Preservation and export of flowers
  29. 29. Meat processing
  30. 30. Manufacture of organic fertilizers, mixed fertilizers, granular urea etc
  31. 31. Manufacture of bio-pesticides, neem derived pesticides etc
  32. 32. Beekeeping/honey making
  33. 33. Particle board
  34. 34. Sugar and other sweetening products
  35. 35. Soyfood Production and Soybean Processing
  36. 36. Mustard oil manufacturing industry (if domestic mustard is used)
  37. 37. Rice bran well
  38. 38. Project for manufacturing of rubber products
  39. 39. Seed Industry
  40. 40. Processing and marketing of dairy and poultry products
  41. 41. Horticulture, floriculture, floriculture, marketing of flowers and vegetables (this industry will include lemons, mushrooms, betel leaves, honey etc.)

List of the Service sectors

Click here for Service sectors

Applying for a CMSME (Cottage, Micro, Small, and Medium Enterprises) loan in Bangladesh typically requires a set of standard documents. These documents help banks and financial institutions assess the creditworthiness and business viability of the applicant. Here are some common required documents for a CMSME loan application:

  1. Loan Application Form

  2. Business Registration Documents:

    • Trade license or business registration certificate
    • Partnership deed (for partnerships)
    • Memorandum and Articles of Association (for companies)
    • VAT
    • IRC and ERC
  3. Identification Documents:

    • National ID card or passport of the business owners
    • Recent passport-sized photographs of the business owners and Guarantors
  4. Financial Documents:

    • Recent financial statements (balance sheet, income statement, cash flow statement)
    • Bank statements for the past 1-3 years
    • Tax return documents with E-Tin
  5. Business Plan or Project Proposal:

    • Detailed business plan outlining the purpose of the loan, expected benefits, and repayment plan
    • Projected financial statements (profit and loss forecast, cash flow forecast)
  6. Collateral Documents (if applicable):

    • Land ownership documents or lease agreement
    • Details of collateral offered (property deed, Stocks of goods with Market value, etc.)
    • Valuation report of the collateral
  7. Proof of Address:

    • Utility bills (electricity, water, gas) in the name of the business or business owner
    • Lease or rental agreement for the business premises
  8. Legal Documents:

    • CIB Undertaking Form
    • Any existing loan agreements or debt obligations
    • No Objection Certificate (NOC) from existing lenders, if applicable
  9. Other Supporting Documents:

    • Quotations or invoices for equipment or inventory to be purchased with the loan
    • Proof of experience in the business or sector (e.g., previous contracts, references)

Banks and financial institutions may have specific requirements or additional documents needed based on their internal policies and the nature of the business. Therefore, it is advisable to contact the specific bank or financial institution for a detailed checklist.

For more detailed guidance, click the below link

  1. FAQ of SME & Special Programmes Department of BB
  2. Master Circular of CMSME Refinance Scheme
  3. Industrial Policy-2022 of Bangladesh
  4. CMSME Cluster Financing Policy of NCC Bank
  5. SME Foundation Website
  6. SME Loan Process Flow

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