IDLC's SME Utsav Loan: Tk 35 lakh available without collateral

A large part of the country's Small and Medium Enterprises (SMEs) businesses depend on certain seasons of the year. Clothing is especially dependent on the season as a product. Eid, Paila Baisakh or winter - these three seasons suddenly increase the demand for clothes. As a result, a large amount of capital is required for the collection and production of raw materials at this time.

Entrepreneurs are reluctant to suddenly get a large amount of capital before the start of the season. Because most of the entrepreneurs get full money by selling the products at the end of the season. As a result, it becomes difficult for an entrepreneur to repay the loan taken from the bank or financial institution in monthly installments.

Non-Banking Financial Institutions (NBFIs) IDLCs have special loan facilities for such SME entrepreneurs. Entrepreneurs want the convenience of selling the products at the end of the season and repaying the loan. Considering this reality, this loan service has been running since 2007. Through this seasonal loan service called 'SME Utsav', an entrepreneur will get an opportunity to repay the loan by selling the products at the end of the season.

What is Seasonal Debt

Seasonal loans do not have to be repaid as regular monthly installments. The interest rate for these SME festival loans will usually be 13-15 percent. However, women customers can take this loan facility at 5 percent interest rate through refinancing facility of Bangladesh Bank.

In this service, if a customer takes a loan of Tk 30 lakh for a period of six months, then only the interest of the loan has to be paid every month. Pay one time capital in the last month. As a result, the business gets time to utilize this capital to make a profit.

Small and medium businesses operating in the vicinity of IDLC branch offices in different regions of the country are covered under this facility. Through this initiative, entrepreneurs in trade, manufacturing, services, agricultural and non-agricultural sectors are also getting loan facilities. The service has been launched especially for entrepreneurs whose businesses have large fluctuations in demand and cash flow depending on the season.

How much money can be availed in season loan

IDLC's SME festival service has a maximum loan tenure of 12 months. Under this initiative, an entrepreneur can take a maximum loan of 1 crore rupees. Out of this, up to 35 lakh rupees can be availed without any collateral.

Through this service, entrepreneurs can repay the loan in equal monthly installments (EMIs) if they want. There is also an opportunity for seasonal payment according to the type of business and seasonal cycle.

Adnan Rasheed, Head of SME Department of IDLC, said that the demand for products usually increases during major festivals like Eid and Puja in the country. Then customers are more interested in this loan. Apart from this, there is a high demand for such seasonal loans in the case of export-oriented businesses to purchase raw materials and increase production capacity on the occasion of international festivals (such as Christmas), collection and storage of large quantities of products after harvest, and tourism sector seasons.

what does it take

Entrepreneurs have to submit some necessary documents initially for loan application. This includes up-to-date trade licence, national identity card, TIN certificate and tax payment certificate.

Apart from this, the business should also submit the last 12 months sales report, rent receipt and bank statement. However, additional information or documents may be requested by the business as required.

Adnan Rashid, head of IDLC's MME department, said that this loan facility has been provided to a total of 1,990 customers so far. Under this service, loan facility of Tk 430 crore has been given so far.