Credit Guarantee Department
| Name & Designation | Telephone | Fax | |
|---|---|---|---|
| Nurun NaharDeputy Governor | nurun.nahar@bb.org.bd | 880-2-9530401 | -- |
| Saiful IslamExecutive Director | islam.saiful@bb.org.bd | 02996636670 | 02996636671 |
| Nahid RahmanDirector (CGD) | nahid.rahman@bb.org.bd | 880-2-9530179 | -- |
Overview of Credit Guarantee Department
To provide credit guarantee to the participating banks and non-bank financial institutions (PFIs) against collateral-free or partial collateralized loan/investment disbursed to cottage, micro, small and medium enterprises (CMSMEs), Credit Guarantee Department (CGD) has formed on July 4, 2022. Besides, the department issues guarantee against loan/investment of the landless farmers, low-income professionals, school banking account holders and small traders that lack of collateral.
Earlier, the department was a Unit, namely Credit Guarantee Scheme Unit (CGS Unit), under SME & Special Programmes Department of Bangladesh Bank. The CGS Unit was established on August 29, 2019, which primarily aims to implement the Local Finance Initiatives Support to SMEs (LF-I-SME) Project in Bangladesh. As the COVID-19 outbreak rapidly surged worldwide as well as Bangladesh, the Board of Directors of Bangladesh Bank approved a fund for CGS worth BDT 20 billion on July 23, 2020, for issuing guarantee against collateral-free or partial collateralized loan/investment of CMSEs to offset the adverse effects of COVID-19 in their businesses. This guarantee fund was enlisted in the 20th Stimulus Financial Package of the Government declared by the Honorable Prime Minister during the pandemic situation of COVID-19.
Major Functions of Credit Guarantee Department
- Formulation, review, and revision of necessary policy, regulations, guidelines, operation manuals etc. for different credit guarantee schemes/programs and issuance of circular/circular letters.
- Formulate and review necessary selection criteria and eligibility criteria for result oriented participation of banks and financial institutions.
- Assessment & introduction of new sectors to support CMSMEs’ through Credit Guarantee Schemes.
- Formulation and review of eligibility criteria for CMSMEs’ from time to time.
- Preparation and dissemination of periodic reports on various aspects of Credit Guarantee Schemes.
- Coordinate, administer and settlement of legal issues.
- Screening and verification of CGS guarantee applications and issuance of guarantees.
- Formulation and up-gradation of an efficient, clearly documented and transparent claim management process.
- Evaluation and validation of claims against guarantees.
- Develop and maintain sound internal control framework to safeguard the operational integrity.
- Prepare and maintain effective and comprehensive risk management and corporate governance framework.
- Monitoring and supervision (on-sight and off-sight) of the guaranteed loans of PFI and loan collection efforts.
- Arrange different capacity and awareness building and promotional programs (i.e. training, seminar, workshop, fair etc.) for CMSMEs’ development in collaboration with different stakeholders.
- Communication and coordination with stakeholders, i.e. Ministries, Government Agencies & Offices, Development Partners, Banks and Financial Institutions.
- Negotiation and implementation of the project(s) on Credit Guarantee Schemes financed by the GoB and other Development Partners.
- Preparation of the Final Accounts of the Credit Guarantee Schemes.
- Administration and maintenance of Credit Guarantee Schemes operational and investment account(s).
- Maintenance and investment of the Credit Guarantee Schemes funds, i.e., seed funds, guarantee fee, and other funds (if any).
- Compliance with audit requirements.
- Collect and analyze Credit Guarantee Schemes data from Banks and Financial Institutions.
- Automation of the Credit Guarantee Schemes operation.
- Any other functions deemed necessary to operate Credit Guarantee Schemes.
Circulars Related to Existing Guarantee Facilities
- Credit guarantee facility for collateral-free working capital loan/investment of CMS under financial incentive package BDT 20,000 Crore for CMSME sector [Detail on SMESPD Circular No. 03, Date: July 27, 2020]
- Credit guarantee facility for marginal/landless farmers, low income professionals, school banking account holders and small traders who have accounts of BDT 10/50/100 [Detail on SMESPD Circular No. 01, Date: January 23, 2020]
- Credit guarantee facility against term-loan/investment to CMSME sector under BDT 25,000 Crore Refinance Scheme [Detail on CGD Circular No. 02, Date: August 10, 2022].