Economists and business insiders said the stimulus loans for the big and small businesses have worked like oxygen to face a crisis during the pandemic period.
Former central bank governor Dr Salehuddin Ahmed told UNB that the central bank has done a tremendous job, emphasizing implementation of stimulus loans.
Despite some criticism of delayed disbursement, the Bangladesh Bank’s contribution to economic recovery is appreciable, he said.
Md Jashim Uddin, president of the Federation of Bangladesh Chamber of Commerce & Industry (FBCCI) and Faruque Hassan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) echoed similar sentiments.
They also acknowledged that the support of the central bank has worked to increase the confidence of businesses which helped them rebound in the production of the industries.
Latest update of stimulus loan disbursement shows that around Tk1.218 lakh crore has been disbursed so far in first and second phases from 10 incentive packages managed by Bangladesh Bank.
Of this, Tk42,173 crore was disbursed to the industry and services sector, Tk20,793 crore in cottage, small and medium enterprises, Tk513 crore in refinancing loans in the pre-shipment sector, and Tk2,492 crore disbursed among low-income professional farmers and small traders.
Besides, Tk21,250 crore from the export development fund, Tk1,933 crore from SME sector loan guarantee scheme, Tk5,000 crore for workers in export-oriented industries, Tk1,390 crore for consumer interest subsidy and Tk4,466 crore for agriculture sector refinancing scheme, has been distributed.
However, a fund of Tk1,000 crore was set up for the salaries and allowances of the employees of hotels, motels and theme parks in the tourism sector but no loan was disbursed.
The BB started implementation of the second phase of 10 stimulus loan packages from July of current fiscal year 2021-22 through banks and FIs.
Bangladesh Bank released an update of stimulus loan activities till January 11, recently. It said banks and financial institutions (FI) have disbursed Tk15,000 crore among 67,000 entities in big and small categories across the country till January 11, 2022.
According to the BB, in the first phase, Tk32,703 crore was disbursed from the announced incentive fund of Tk40,000 crore for the industry and services sector. Some 3,306 units have received this loan. In the second phase Tk9,470 crore has been distributed from this fund to 972 businesses.
Although the interest rate of this fund is 9%, the customers have to pay 4.5% while the government bears the rest.
Besides, Tk5,407 crore has been disbursed in the second phase under the announced stimulus package for cottage, small and medium enterprises. Around 35,760 enterprises have received loans from this fund of Tk20,000 crore. In the first phase, a loan of Tk15,386 crore was given from this fund to 97,814 enterprises.
The interest rate on this loan is 9%, but here again the government is giving a 5% subsidy on the interest rate.
In the agriculture sector Tk379 crore has been disbursed to 30,238 farmers/clients from the agriculture refinance funds in the second phase. In the first phase Tk4,295 crore was distributed to 1.85 lakh farmers and agro based industries.
The farmers and agro industries have received the loans at 4% interest rate and Bangladesh Bank has provided the refinance funds to the lender banks at 1% interest rate.
Bangladesh Bank officials said that there was not as much interest to receive stimulus loans in the second phase. Demand for stimulus loans was higher among the businesses in the first phase.
In fact, the time has now come for those who have taken loans to repay their loans, they told UNB. And this too is a sign of the recovery underway.