United Commercial Bank PLC (UCB) and Bangladesh Bank have signed an agreement in Dhaka to provide low-interest loans at a maximum rate of 7% for cottage, micro, small and medium enterprises (CMSMEs) under a refinancing framework aimed at expanding cluster-based financing, the institutions said in a press release.
The agreement, signed at Bangladesh Bank headquarters under the Cluster Financing Scheme, is designed to improve access to affordable credit for small entrepreneurs across priority industrial sectors and support employment generation and sustainable economic growth.
Under the arrangement, Bangladesh Bank provides refinancing support while UCB will extend loans to eligible CMSME borrowers across the country. The signing ceremony was attended by Bangladesh Bank Deputy Governor Nurun Nahar.
The agreement was exchanged by Nawshad Mustafa, Director of the SME and Special Programs Department (SPD) of Bangladesh Bank, and Nabil Mustafizur Rahman, Additional Managing Director of UCB.
Priority CMSME clusters under the scheme include agro and food processing, agricultural machinery manufacturing, ready-made garments, knitwear, design and decoration, ICT, leather and leather goods, light engineering and jute products.
Other eligible sectors include plastics and synthetic industries, tourism, home textiles, renewable energy including solar power, automobile manufacturing and repair, handloom, handicrafts and cottage industries, energy-efficient equipment such as LED and CFL bulb manufacturing, electronics and materials development, jewellery, toys, cosmetics and toiletries, agarwood products, furniture, and mobile, computer and television servicing.
Loan limits will be determined under Bangladesh Bank’s SME classification guidelines. Both working capital and term loans will be available, with repayment periods of one year for working capital loans and two to five years for term loans.
The maximum lending rate for end borrowers has been set at 7%, with the initiative aimed at strengthening cluster-based industries and improving financial access for entrepreneurs.
UCB officials present included Md Ridwanul Haque, Deputy Managing Director and Head of Distribution and Strategy, and Mohammad Selim Chowdhury, Head of SME, along with senior officials from both institutions.
