Stimulus Packages Small industries ignored
Only 17.61 per cent loan was disbursed to small and cottage industries against a whopping 68.36 per cent to big industries under the stimuli announced in April to tackle the COVID-19-induced economic crises.
About 9,050 entrepreneurs borrowed Tk 3,522.50 crore from Tk 20,000-crore stimulus for small and cottage industries while 1,721 borrowed Tk 22,561 crore from Tk 33,000-crore stimulus for big industries until August.
The assessment has been done by financial institute division under the ministry of finance.
Banks and non-bank financial institutions are blamed for the widening gulf in distribution pattern of loan packages as they consider small businesses low priority which prompted Bangladesh Bank to serve show cause to 45 of them on October 1.
‘The loan disbursement trend is disappointing,’ said former Bangladesh Bank governor Salehuddin Ahmed while talking to New Age on Saturday.
He pointed out that the small and cottage industries should not be neglected as they are crucial to the processes of economic recovery following the downturn caused by the 66-day countrywide shutdown since March 26 due to the COVID-19 outbreak.
Packages to small industries and big industries accounts almost 50 per cent of the overall credit programme of Tk 1,06,117 crore under 19 stimuli.
Income of small and medium enterprises in the rural areas dropped by 67 per cent in 2020 compared to the previous year while 76 per cent goods produced by the entrepreneurs remained unsold, according to a telephone-based survey by Bangladesh Institute of Development Studies in June.
More than 80 per cent of the country’s workforce engaged in the informal sector is linked with small and medium enterprises.
The BB is responsible for disbursing 80 per net of the stimulus fund under eight packages announced by prime minister Sheikh Hasina and it has taken a series of measures to increase the supply of money in the banking chancel for successful disbursement of loans.
On Thursday, the central bank asked 31 banks and 14 non-bank financial institutions to find out why they failed to disburse the targeted amount of loans, especially to small industries, said BB spokesman M Serajul Islam.
The central bank also asked them to disburse the remaining fund by this month.
Association of Bankers, Bangladesh Limited chairman Ali Reza Iftekhar said that the banks were already overcoming the sluggish disbursement rate to small industries.
Citing a delay in amending the loan disbursement criteria to the small industries, he said that the rate would teach 80 per cent at the end of the current month.
In a last month review meeting on the BB sponsored eight packages, the financial institutions division found that Tk 5,000 crore loan at 2 per cent service charge was disbursed fully for paying wages of readymade garments factories.
Besides, $1.72 billion was disbursed under the export development fund for the exporter at 2 per cent interest rate from previous variable rates.
Only Tk 276 crore to 9,882 borrowers was given under Tk 3,000 crore refinancing scheme for peasant and Tk 497 crore to 17,801 borrowers under Tk 5,000 crore agriculture refinancing scheme.
News Courtesy: www.newagebd.net
