Nearly Tk 12,000cr of private sector stimulus disbursed

Bangladesh Bank has disbursed around Tk 12,000 crore of its Tk 60,000 crore stimulus package by mid-October to revive struggling businesses, reopen closed factories and boost investment and employment.

More than Tk 2,500 crore was still in the process of being disbursed, according to the central bank’s latest progress report.

However, several targeted sectors, including jobless youths, have yet to receive any loans.

Announced in May, the package aims to support the troubled private sector, revive economic activity and create jobs.

It has two components: a Tk 41,000 crore refinancing fund sourced from banks with excess liquidity and a Tk 19,000 crore fund drawn from Bangladesh Bank’s own resources, backed by a government guarantee.

The scheme-wise performance showed considerable differences, with export pre-shipment credit and cottage and micro-enterprise financing recording substantial disbursements, while several employment, export diversification and rural development schemes registered no loan disbursement.

The pre-shipment credit refinance scheme emerged as the largest contributor to disbursements, with Tk 6,917 crore released against its Tk 5,000 crore target, exceeding the allocation by 38 percent.

The cottage and micro sector entrepreneurs special scheme disbursed Tk 2,500 crore against its Tk 5,000 crore target, achieving 50 percent implementation.

The CMSME working capital refinance fund released Tk 908 crore against an allocation of Tk 5,000 crore, while the creative economy scheme fully disbursed its Tk 500 crore allocation.

The overseas employment financing scheme disbursed Tk 200 crore against a target of Tk 1,000 crore.

The agriculture and rural food security refinance scheme, which has an allocation of Tk 10,000 crore, disbursed Tk 293 crore, representing around 3 percent of its target.

Similarly, the agro-based special economic center in North Bengal recorded disbursements of Tk 49 crore against its Tk 3,000 crore allocation.

Syed Mahbubur Rahman, former chairman of the Association of Bankers, Bangladesh (ABB), said even a normal loan takes more than two to four months to disburse.

Disbursing a loan requires examining many things, processing them, and involves various steps. On top of that, these are all closed factories, so even more work is required here, he said.

Furthermore, he added, there are many guidelines to follow when granting these loans under the package. For instance, there is a condition that those who have not engaged in money laundering will get the loan, but it is difficult for banks to be certain about this.

Moreover, he said, applicants must apply to receive the loan, which many do not do. In addition, there are gas shortages and several other problems, so many do not even apply.The biggest issue is that loans must be disbursed after considering whether they will be repaid. Banks have already started disbursing loans, and considering everything, loan distribution may gradually increase in the future, he added.