Abu Sazzad: The objective of expansionary monetary policy is going against the economic revamping mechanism mainly due to credit inequality between the large and small scale stakeholders, increasing economic disparity as well as forcing the mass people to face profound uncertainty in terms of managing minimum requirements of life.
Bangladesh Bank has adopted an expansionary monetary policy for the ongoing fiscal with the objectives of achieving the recovery of the economy from the adversity of the COVID-19 pandemic, resumption of production capacity, restoration of the normal livelihood of the people while maintaining dual goals of price stability and sustainable economic growth which are just like a bookish term.
Formulating of the expansionary monetary policy is not enough to revamp business and economic activities as the farmers and small scale stakeholders are still failing to avail the adequate financial support from the banking sector.
“Bumper agriculture production is the only ray of hope for the country to tackle the negative impact of virus pandemic, so the discouraging attitude towards farmers and small scale stakeholders in distributing the government declared financial, traditional and motivational banking assistance are not appreciable to the mass people of the country”, Ayub Jion, Senior Lawyer of Bangladesh Supreme Court told the Daily Industry yesterday.
Article 27 of the constitution stipulates that all citizens are equal before the law and are entitled to get equal protection by the law but we are deliberately creating dividation and depriving the poor and underprivileged people, he lamented.
He recommended the central bank to speed up its monitoring so that the big borrowers, marginal farmers and small scale stakeholders can avail equal importance from the financial institutions and the government. “The traditional borrowers are sucking the public money from the banking sector since the last one decade through implementing various banking policy while the small ones are facing policy complexity to avail bank credit, impeding the steady growth of the country”, he added.
However, policy measures and strategies are designed to make adequate financial supports available to all priority sectors like agriculture, cottage industries, micro, small and medium enterprises (CMSMEs), manufacturing industries, and the service sector, but it is very unfortunate for the whole nation that big borrowers are availing the highest credit facility from the financial sector, especially from the banking sector, while the small scale stakeholders and marginal farmers are struggling for survival.
In this backdrop, Prime Minister Sheikh Hasina declared the stimulus loan packages worth over 1.06 trillion for the stakeholders of entire sectors, but the responsible authority are deliberately imposing policy complexity for disbursing such financial assistance in a fair and transparent manner.
According to a Daily Industry report, the traditional large scale stakeholders in the industrial and service sector already availed almost their shares under stimulus packages, but the small scale stakeholders and farmers are still not getting adequate credit facilities from the financial institutions that may lead economy into further vulnerability.
A senior Bangladesh Bank official said that a pragmatic agricultural and rural credit policy has been adopted by relaxing terms and conditions for inclusive loan disbursement. In view of the importance of the agriculture sector in terms of employment generation, food security, and poverty reduction in the country, the central bank instructed commercial banks to disburse loans promptly among the farmers. Besides, to increase financial flow to the CMSMEs sector, a credit guarantee scheme has been undertaken so that banks can disburse more credit to the sector and minimize their risks.
On the other hand, banking sources informed that so far only 20 percent loan amount has distributed among the agriculture sector and small scale stakeholders.
Mirza Walid Sipon, President of Jubo Economist Forum said that credit inequality between large and small scale stakeholders is a bad culture, increasing economic disparity and hindering growth of the country.
The big borrowers are directly patronized by the political arena which would help facilitating the large scale stakeholders to avail banking credit while the small ones are depriving to gain the state facility”, he claimed.
“Of course, bankers will have to change their mind to facilitate the farmers, small stakeholders, underprivileged women entrepreneurs for attaining further development and inclusive economic growth”, he recommended.