In April, private sector credit growth stood at 8.29%, down from 8.79% a month ago
Private sector credit growth continues to dip as the country’s economy faces a fresh blow from the second wave of the global Covid-19 pandemic.
In April, private sector credit growth stood at 8.29%, down from 8.79% a month ago, as per the latest data from the Bangladesh Bank.
The private credit growth in April slightly impacted owing to the strict restriction on movement to tackle the second wave of the pandemic, said Selim RF Hussain, CEO and managing director of the BRAC bank.
He also said that most of the clients in the banking sector are large industries, who have not invested in new projects amid the ongoing pandemic.
"However, the credit growth rose in our bank that month as we are a SME-focused lender," said Hussain, adding that the recovery rate from borrowers is also good amid the ongoing pandemic.
The Brac Bank managing director hoped that the economy and business will pick up speed within the next six month owing to the proposed pro-manufacturing budget for the next fiscal year.
The private credit growth in February started to rise but it fell again from March of this year as the second wave of the Covid-19 pandemic further affected the country's businesses and economy.
As coronavirus cases continued to rise alarmingly since mid-March, the government imposed a nationwide lockdown for a week from April 5 to contain the surge. Later, a stricter lockdown was declared from April 14 to 21 which were later extended till June 16.
The credit growth has been hovering around the 8% mark for a few months as businesses remain apprehensive about making fresh investments amid the pandemic.
The April figure is 6.51 percentage points lower than the Bangladesh Bank’s target for this fiscal year.
Private sector credit growth started to increase from February centering Eid-ul-Fitr but it fell again owing to the ongoing stagnant situation of business and economy,” said Emranul Huq, managing director of Dhaka Bank.
Between February and June last year, private sector credit growth consistently dropped when the global coronavirus pandemic was at its most ominous form.
From 9.2% in January, it came down to 8.6% in June last year as the lenders refrained from disbursing credit during the countrywide shutdown from March 26 to May 30.