Small business owners and new entrepreneurs in Bangladesh often face difficulties accessing loans due to complex procedures and lengthy approval processes. To address this challenge, United Commercial Bank (UCB) has introduced two separate loan schemes aimed at supporting new entrepreneurs and small business owners.
The two schemes—“Suchona” for new entrepreneurs and “Progoti” for small business owners—allow eligible borrowers to receive loans ranging from BDT 50,000 to a maximum of BDT 400,000 without collateral.
Under the Progoti scheme, small business owners can borrow between BDT 50,000 and BDT 300,000, provided they have at least two years of business experience. In some cases, branch managers are authorized to approve and disburse these loans within a single day, subject to submission of required documents.
Loans under both schemes carry an interest rate of 7 percent under refinance facilities and 15 percent for regular loans.
What the Suchona and Progoti Schemes Offer
Suchona Scheme for New Entrepreneurs
UCB’s Suchona scheme is designed specifically for first-time entrepreneurs. Loans under this scheme are repaid in monthly installments and do not require any collateral. Applicants must be between 21 and 45 years old, and prior business experience is not mandatory.
Under Suchona, new entrepreneurs can borrow between BDT 100,000 and BDT 400,000, with a maximum repayment period of two years. The loan can be used for starting a business, working capital, purchasing fixed assets, or other relevant business purposes.
Loans under this scheme are categorized into three groups:
- Category A: Entrepreneurs with skill-based qualifications. Applicants must have at least an HSC degree or possess vocational, technical, or government-recognized training certificates, including diplomas or courses from polytechnic institutions.
- Category B: Applicants must hold a minimum of a bachelor’s degree. Priority will be given to those planning to start a business or those with innovative and promising business ideas.
- Category C: Priority will be given to potential entrepreneurs with at least two years of work experience, including informal business experience. Individuals who have successfully repaid loans from NGOs or microfinance institutions will also receive preference under this category.
Progoti Scheme for Small Business Owners
The Progoti loan scheme primarily targets small business owners. Under this scheme, borrowers can access loans ranging from BDT 50,000 to BDT 300,000, repayable in biweekly (15-day interval) installments.
The maximum repayment period for Progoti loans is one and a half years. No collateral is required; however, applicants must be between 21 and 65 years old and have at least two years of business experience.
Required Documents
To apply for loans under either scheme, applicants must submit:
- A valid trade license
- National Identity Card (NID)
- Details of a guarantor
- Financial statements, tally records, or stock inventory details
UCB’s Objective Behind the Initiative
Mohammad Selim Chowdhury, Head of SME and Agricultural Banking at United Commercial Bank, said the initiative aims to encourage entrepreneurial mindset and bring first-time and unbanked entrepreneurs into the formal banking system.
“The primary goal of this program is to achieve zero unemployment and support poverty alleviation. Entrepreneurs who have successfully repaid loans from NGOs or microfinance institutions will receive higher priority,” he added.
