Bangladesh Bank has restructured its refinancing scheme with Tk 500 crore for low-income group people holding bank accounts of Tk 10, 50 and 100.

Earlier, it was a Tk 200 crore fund with refinancing facilities and the Tk 500-crore new fund has been set up with the central bank's own support.

According to a Bangladesh Bank circular, issued on Sunday, the new fund was named as 'Refinancing Scheme for Marginal, Landless Farmers, Low Income Professionals, School Banking Account Holders and Small Businesses with Tk 10, 50 and 100 accounts.

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The central bank said the refinancing scheme, having 5 years’ operational tenure with extending scope, was set up to extend financial support to the low-income people to offset the effect of the Covid-19 that severely affected their businesses. The fund could be rotating within the stipulated period.

The central bank said the scheme will be used for providing loans to small and micro entrepreneurs and professionals, blacksmiths, potters, fishermen, landless farmers, hawkers, shopkeepers and rickshaw pullers.

Each account holder of the groups will be able to take a loan of up to Tk 5 lakh without deposit or collateral while a group could take up to Tk 20 lakh.

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The maximum interest rate on this loan will be 7 percent but no loan defaulter will be eligible to avail of it.

The Financial Inclusion Department of the Bangladesh Bank restructured the new scheme and issued a policy in this regard.

It said the credit limit and the amount of funds have been increased to recover and revive the economic activities of low-income professionals and small traders affected by the outbreak of the Covid-19 pandemic.