Cenbank announces the scheme in June, but banks took until October to complete application and scrutiny process.
Bangladesh Bank’s Tk20,000 crore refinancing scheme to revive closed factories has gained some momentum, with loan disbursements rising to Tk560 crore by 18 October, although most applications remain under processing.
According to the central bank’s latest data, banks have submitted loan applications worth Tk1,490 crore under the scheme, of which Tk560 crore has been disbursed and another Tk929 crore is being processed for disbursement.
The scheme had received applications worth Tk800 crore by 30 September, against which Tk110 crore had been disbursed to eight businesses, indicating a pickup in financing over the following 18 days.
However, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) says none of the nearly 200 garment factories it certified as meeting the scheme’s requirements has received funding.
“We understand that not a single factory has received funds under this scheme so far,” said BGMEA Vice-President Md Shihab Uddoja Chowdhury.
Four factory owners also told TBS that they are still waiting for funds to be released.
According to Bangladesh Bank’s latest figures, 15 refinancing schemes with a combined allocation of Tk60,000 crore had received applications worth Tk14,519 crore. Of this amount, Tk11,959 crore had been disbursed, while applications worth another Tk2,560 crore remained under processing.
Of the package’s total allocation, Tk41,000 crore was earmarked for refinancing, including Tk19,000 crore to be provided from Bangladesh Bank’s own funds.
Infographics: TBS
Banks cautious despite low-cost central bank funding
The Bangladesh Bank announced the scheme in June, but banks took until October to complete the application and scrutiny process.
Although the central bank provides liquidity at a lower interest rate, commercial banks bear the entire credit risk associated with the loans. They are solely responsible for assessing borrowers’ business capacity and prospects for survival.
Under the arrangement, borrowers first apply through commercial banks. The banks then assess the applications and forward those they approve to Bangladesh Bank for funding.
This allocation of credit risk may be contributing to the slow progress, although the available data do not establish the reasons for the delays.
At the launch of the broader package, Governor Md Mostaqur Rahman said the initiative could create around 25 lakh new jobs.
Other refinancing schemes show mixed performance
Performance across the other refinancing schemes varies considerably, with export pre-shipment credit and cottage and micro-enterprise financing accounting for substantial disbursements, while several employment, export diversification and rural development schemes have made little or no progress.
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 allocation, achieving 50% implementation.
The CMSME Working Capital Refinance Fund disbursed Tk907.73 crore against its Tk5,000 crore allocation, while the Creative Economy Scheme fully disbursed its Tk500 crore allocation.
The Overseas Employment Financing Scheme released Tk200 crore against a Tk1,000 crore target.
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 disbursed Tk48.67 crore against its Tk3,000 crore allocation.
The Start-up Sector Financing Scheme recorded Tk32.59 crore in disbursements, with another Tk5 crore under processing, against its Tk500 crore allocation.
The Unemployed Youth Employment Financing Scheme had 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, while 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 applications 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.
Source: The Business Standard
Read More at: csslbd.net
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