SMALL INDUSTRY II

closed

To support the development of small and cottage industries (SCIs), including the strengthening of BSCIC for promotion and extension work and the commercial banks for lending to SCIs. The credit will finance (a) sub-loans for equipment and permanent working capital; (b) a special capital fund for providing supplementary financing to selected projects for which the sponsors are unable to provide sufficient equity; (c) a pilot cottage industry component for jute and cane/bamboo handicrafts; and (d) technical assistance to strengthen BSCIC's promotion and extension work. The risk relates to the limited experience of commercial banks in financing fixed investments for SCIs and of BSCIC in promotion and extension. Therefore, the project incorporates clearly defined criteria for project selection and supervision, tasks involved in promotion and extension, and technical assistance in aspects requiring improvement.