Dhaka Chamber of Commerce and Industries (DCCI) President Osama Taseer on Saturday said that high interest rates of credits were raising the production costs, reducing the competitiveness in global market.
“For surviving in export market and uplifting local industries, we must have loans at single digit interest rates,” he said and added that because of the high interest rates they were lagging behind others in producing goods at competitive prices.
Taseer came up with the remarks while addressing a press conference on Bangladesh economy and private sector at DCCI office in the capital. DCCI Vice-Presidents Waqar Ahmad Choudhury and Imran Ahmed were present, among others.
The DCCI president said the bank interest rates were still high – hovering around 11-15% on an average – though the government also emphasized lowering the rates as early as possible.
“The country’s economy and businesses are growing but entrepreneurs, especially small and medium ones, are struggling due to unavailability of loans at affordable rates,” he said, warning that the situation might worsen if the trend continued.
He said the current inflation rate, liquidity crisis at banks and growing non-performing loans (NPL) were the reasons behind the high lending rates.
The NPL now stands at Tk1,12,425crore, a 11.66% of the total outstanding loan. Besides, banks are failing to raise their deposits as a good amount goes for the high profit-providing savings certificates.
Taseer underscored good governance at banks, amendment to banking laws, checking inflation and reducing savings certificate interest rates for strengthening banking sector so that businesses could get easy financing.
He also recommended that the government mobilize domestic revenue rather than depend on banks and saving tools for meeting the fiscal deficit.
More recommendations for uplifting private sector
The DCCI president said the country’s economy was growing and the role of private sector was crucial in this regard. Despite huge potentials, he added, the sector was now facing huge challenges.
The DCCI put 12 recommendations for addressing the challenges.
They are quality ADP implementation, keeping energy prices at rational level with adequate supply, reforming several policies, rationalizing corporate tax rate, digitalization of customs, increasing capability of ports, strengthening economic diplomacy with trade partner, updating course curriculum at universities for skilled manpower, enhancing product diversification in export basket, exempting the recently introduced advance tax (AT), developing special economic zones and other industrial zones fast, developing an effective bond market and helping ICT entrepreneurs with providing funds.
