Bangladesh Bank

Credit Guarantee Department   

Name & Designation Email Telephone Fax
Nurun NaharDeputy Governor
Mohammad Jamal UddinExecutive Director
Nahid RahmanDirector (CGD)

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

  1. Formulation, review, and revision of necessary policy, regulations, guidelines, operation manuals etc. for different credit guarantee schemes/programs and issuance of circular/circular letters.
  2. Formulate and review necessary selection criteria and eligibility criteria for result oriented participation of banks and financial institutions.
  3. Assessment & introduction of new sectors to support CMSMEs’ through Credit Guarantee Schemes.
  4. Formulation and review of eligibility criteria for CMSMEs’ from time to time.
  5. Preparation and dissemination of periodic reports on various aspects of Credit Guarantee Schemes.
  6. Coordinate, administer and settlement of legal issues.
  7. Screening and verification of CGS guarantee applications and issuance of guarantees.
  8. Formulation and up-gradation of an efficient, clearly documented and transparent claim management process.
  9. Evaluation and validation of claims against guarantees.
  10. Develop and maintain sound internal control framework to safeguard the operational integrity.
  11. Prepare and maintain effective and comprehensive risk management and corporate governance framework.
  12. Monitoring and supervision (on-sight and off-sight) of the guaranteed loans of PFI and loan collection efforts.
  13. Arrange different capacity and awareness building and promotional programs (i.e. training, seminar, workshop, fair etc.) for CMSMEs’ development in collaboration with different stakeholders.
  14. Communication and coordination with stakeholders, i.e. Ministries, Government Agencies & Offices, Development Partners, Banks and Financial Institutions.
  15. Negotiation and implementation of the project(s) on Credit Guarantee Schemes financed by the GoB and other Development Partners.
  16. Preparation of the Final Accounts of the Credit Guarantee Schemes.
  17. Administration and maintenance of Credit Guarantee Schemes operational and investment account(s).
  18. Maintenance and investment of the Credit Guarantee Schemes funds, i.e., seed funds, guarantee fee, and other funds (if any).
  19. Compliance with audit requirements.
  20. Collect and analyze Credit Guarantee Schemes data from Banks and Financial Institutions.
  21. Automation of the Credit Guarantee Schemes operation.
  22. Any other functions deemed necessary to operate Credit Guarantee Schemes.

Circulars Related to Existing Guarantee Facilities

  1. 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]
  2. 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]
  3. 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].