Previously, foreign companies only under BEZA, the Bangladesh Export Processing Zones Authority (BEPZA), and Hi-Tech Parks enjoyed such facilities
From now on, both 100% foreign-owned and foreign-domestic owned enterprises in Bangladesh will get loans from the stimulus packages announced to fight the economic effects of Covid-19, according to a notice issued by Bangladesh Bank.
According to the notice issued Monday, banks and non-bank financial institutions (NBFIs) have been instructed to integrate all sorts of industries including export-oriented ones owned by foreign or foreign-domestic entrepreneurs under the stimulus packages.
Previously, foreign companies under the Bangladesh Economic Zone Authority (BEZA), the Bangladesh Export Processing Zones Authority (BEPZA), and Hi-Tech Parks enjoyed such facilities.
According to BEZA, this will boost the confidence of investors who have been enabling job creation in the local market.
Speaking to Dhaka Tribune on the basis of anonymity, a top official of BEZA termed this move as a much-needed and commendable one.
“If you treat a guest well, it is bound to be fruitful in terms of reputation. Definitely, such kind of equal treatment to foreign investors is bound to garner a reputation in the global market,” he added.
The local and foreign companies will be able to avail loans from the stimulus packages through banks and NBFIs, so they can continue production and generate employment, he added.
According to an official of the Bangladesh Bank, although a notice was published in October last year that brought in foreign-owned companies under the stimulus package, only foreign industries located within the special zones could avail it.
“There was a certain degree of inequality among the industries that have been addressed with the new instructions,” said the central banker.
According to WTO rules, all industries in a country should be given equal benefits.
Prior to the issuance of the notice, foreign investors had demanded to be given access to the stimulus funds through the Foreign Investors Chamber of Commerce and Industry (FICCI).
Speaking to Dhaka Tribune, the top official of a multinational company explained there are several foreign-owned industries that do not have a financial cushion with very tight working capital and backward linkage that have been severely disrupted by the pandemic.
“These companies work on letters of credit and have low working capital. Having backward linkage and support to such industries have been crucial,” the official said.
Following the advent of the pandemic, the government announced a stimulus package of Tk7,000 crore to provide working capital for the export-oriented industries under BEZA, BEPZA, and Hi-tech Parks.