Disbursement under Bangladesh Bank's Tk20,000 crore refinancing scheme to revive closed factories has gathered some momentum, with around Tk450 crore released over the 18 days.
As of 1 October, Bangladesh Bank had received loan applications worth only Tk800 crore for closed factories. Of this, just Tk110 crore had been disbursed to eight companies.
According to the central bank's latest data, applications worth Tk1,490 crore had been submitted by 18 October, of which Tk560 crore had been disbursed. Loans worth the remaining Tk929 crore were under processing for disbursement to borrowers.
Bangladesh Bank announced the scheme in June. However, banks took until October to complete the application and scrutiny processes.
Although the central bank is providing liquidity at lower interest rates, commercial banks must bear the entire credit risk associated with the loans. This is because banks alone are responsible for assessing borrowers' business capacity and prospects for survival.
Under the scheme, borrowers first apply through commercial banks. The banks then assess the applications and forward those they approve to the central bank for financing.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said it had issued certificates to around 200 garment factories for the scheme after audits confirmed that they met the required criteria. However, the association said none of these factories had received funding so far.
"To our knowledge, not a single factory has received funds under this scheme so far," said BGMEA Vice-President Md Shihab Uddoja Chowdhury.
Speaking to The Business Standard, four factory owners also confirmed that they were still waiting for the funds to be released.
According to Bangladesh Bank's latest data, the 15 schemes currently operating under the central bank have received applications worth a total of Tk14,519 crore against a combined allocation of Tk60,000 crore. Banks have disbursed Tk11,959 crore, while loans worth the remaining Tk2,560 crore are under processing.
When the package was launched, Governor Md Mostakur Rahman said the initiative could create around 25 lakh new jobs. Of the total allocation, Tk41,000 crore had been earmarked for refinancing, with Bangladesh Bank set to contribute Tk19,000 crore from its own funds.
Performance of other schemes
The performance of the individual schemes varied considerably. Export pre-shipment credit and financing for cottage and micro-enterprises recorded substantial disbursements, while several employment, export diversification and rural development schemes made limited progress or recorded none.
The Pre-shipment Credit Refinance Scheme recorded the highest disbursement, releasing Tk6,917 crore against its Tk5,000 crore target — exceeding the allocation by 38.34%.
The Cottage and Micro Sector Entrepreneurs Special Scheme disbursed Tk2,500 crore against its Tk5,000 crore target, achieving 50% implementation.
The CMSME Working Capital Refinance Fund released Tk907.73 crore against an allocation of Tk5,000 crore, while the Creative Economy Scheme fully disbursed its Tk500 crore allocation.
The Overseas Employment Financing Scheme disbursed Tk200 crore against a target of Tk1,000 crore.
The Agriculture and Rural Food Security Refinance Scheme, with an allocation of Tk10,000 crore, disbursed Tk292.90 crore, equivalent to 2.93% of its target.
The Agro-based Special Economic Centre in North Bengal recorded disbursements of Tk48.67 crore against its Tk3,000 crore allocation.
The Start-up Sector Financing Scheme recorded total progress of Tk37.59 crore against an allocation of Tk500 crore. Of this, Tk32.59 crore had been disbursed, while Tk5 crore was under processing.
The Unemployed Youth Employment Financing Scheme had applications worth Tk1,000 crore under processing against its Tk1,000 crore allocation, with no disbursement recorded as of 15 October.
The Green Factory Building and Green Industries Refinance Scheme had Tk527.47 crore under processing against its Tk1,000 crore target. Meanwhile, the Leather Goods and Footwear Export Sector Scheme had Tk98 crore under processing against its Tk2,000 crore allocation. Neither scheme had recorded any disbursement.
Three schemes — the Export Diversification Refinance Scheme, the Rural Economic Activity Dynamics Scheme, and the Frozen Shrimp and Other Fish Export Sector Scheme — had recorded neither disbursements nor funds under processing.
Their combined allocation stood at Tk6,000 crore, comprising Tk3,000 crore for export diversification, Tk1,000 crore for rural economic activities and Tk2,000 crore for frozen shrimp and other fish exports.