Abu Sazzad: The new borrowers are facing huge difficulties to avail the financial assistance under the government declared stimulus loan package mainly due to the application of traditional disbursement mechanism by the banks, said stakeholders.
Delay in loan disbursement process to the fresh borrower is imposing a threat to keep maintain the existence of many stakeholders which may foil the initiative of the Prime Minister Sheikh Hasina to revamp the business and economic activities accordingly from the negative impact of COVID-19 pandemic.
Instead of ensuring hassle-free loan disbursement policy, the banks are delicately taking more time to disburse the required loan amount in favour of the fresh borrowers. Banks are still following the traditional credit mechanism for the fresh borrowers while the recognized borrowers based on the ‘banker- customer’ relationship are getting priority to provide the financial assistance. Under such policy, the fresh bowers are depriving and once again the big borrowers are being patronized by the bankers, claimed stakeholders.
So far, the government announced 19 stimulus packages amounting Tk 103,117 crore which is equivalent to almost 3.50 percent of country’s gross domestic product (GDP). Of the total amount, only the Tk 5,000 crore stimulus package for export sectors have been fully disbursed until now.
On the other hand bankers said, commercial banks are strictly verifying the information of the stakeholders to disburse such loan. The loan disbursement to the fresh borrowers is delaying for conducting the contact point verification (CPV) by the third party and credit assessment by the bankers.
A senior Bangladesh Bank official said, Bangladesh Bank issued over 66 circulars after declaring the stimulus loan package. Out of the 19 packages, five worth Tk 65,000 crore, are being implemented through the banks which includes stimulus for export-oriented and other industries like the service sector, SMEs, agriculture, and refinancing for pre-shipment credits.
Experts said, Bangladesh Bank has already formed many funding options to implement the stimulus loan package, but its standon the traditional and strict collateral based loan policy would facilitate the big borrowers in availing the lion share of the government declared financial assistance for revamping business and economic activities concentrating the novel coronavirus outbreak.
Absence of evident and effective policy guideline related with the eligibility of the financial assistance under stimulus loan package is delaying the disbursement process among the affected stakeholders of all sectors. They have underscored the need for ensuring the loan feasibility of the government declared bailout package to tackle the economic recession. Actually, country’s economy is facing the worst ever recession due to suspension of business and economic activities in the wake of COVID-19 pandemic. To overcome the challenges, prudent economic policy is a must. According to a Daily Industry report, the big borrowers are going to receive the lion share of government declared stimulus loan packages.
Talking to Daily Industry, FBCCI President Sheikh Fazle Fahim underscored the need for maintaining accountability and transparency in disbursing the stimulus loan packages to rebound business and economy from the ongoing COVID-19 pandemic. The fresh borrowers should get the same treatment like the traditional borrowers because all stakeholders are facing trouble to run their business.
He urged the country’s banks to undertake prompt steps to disburse the stimulus money for recovering the economic loses. “The banks should play a proactive role by adopting easier ways to help the country’s cottage, micro, small and medium enterprises get their share.
Fahim said, the government-announced stimulus package but now it is the responsibility of the banks to do the rest. “The banks must come forward to quickly execute the plans for stimulus package in a bid to help the national economy survive.
Global Economist Forum (GEF) President Dr Enayet Karim recommended for applying hassle- free credit mechanism to disburse the Prime Minister Sheikh Hasina declared stimulus loan packages to revamp business and economic activities.
All stakeholders need immediate financial assistance to save their existence from the negative impact of the novel coronavirus, he mentioned.
He laid emphasize for ensuring loan feasibility to overcome from the ongoing disaster. “If banks follow the traditional collateral based loan process, many affected stakeholders will fail to meet the bank criteria in availing government declared stimulus loan package”, Enayet Karim added.
He also recommended for ensuring transparency in allocating such financial assistance among the stakeholders to save many existing businesses and to protect economy from recession. “If the big borrowers may avail the lion share of stimulus loan package that may lead the banking sector and economy into more vulnerable.
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