Industry Desk: The whole world is now badly infected by the COVID-19 pandemic. In addition to the COVID-19 related health and safety issues, there is a need to discuss possible measures for liquidity in the economy and financial sector. COVID-19 can certainly cause a global recession, and in the worst-case scenario, it could even take the form of a great depression. Like many other economies, Bangladesh’s economy is likely to be badly damaged. According to economists, Bangladesh’s GDP could shrink by 2-3 percent. Due to the COVID-19 Bangladesh RMG sector, the top export earning sector of Bangladesh, facing a difficult time. To overcome the effects of coronavirus, all big and small industries of Bangladesh have applied for low-interest loans from the incentive package announced by the government.
Applicants include organizations in both the manufacturing and service sectors. All the customers are applying for this loan.
The main reason for applying in this way is that even though the interest rate of this loan is 9 percent but they have to pay only 4 and a half percent. The government will bear the remaining 4 and a half percent. It costs more to borrow loan from abroad bank.
Meanwhile, the banks are saying that only the customers who will repay will get this loan. Because, even if the government pays half of the interest, all the responsibility of collecting this loan will remain with the bank.
The government announced an incentive package of Tk 30,000 crore to provide loans to companies in the industrial and service sectors affected by the COVID-19. Bangladesh Bank has set up a revolving refinancing fund to provide half of this loan that is Tk 15,000 crore. All the banks will give a total of Tk 28,865 crore and the non-bank financial institutions will distribute Tk 1,135 crore.
According to the central bank’s policy, the term of this loan will be three years. Industries that have already availed capital from the bank will be able to borrow up to a maximum of 30 percent from this fund. However, only the victims will get this loan. Debtors will not get any loan from this fund. Not only defaulters but also traders who have rescheduled loans more than three times won’t be able to get the loans.
The loans that have been given to be recovered from the COVID-19 pandemic, however, for such critical preconditions it is not working accordingly. Also, the ability of customers to repay the loan is much less than before. So, the bankers are being very careful in giving loans for this.
According to the data, all the textile industries are applying for low-interest loans to sustain in the RMG sector. The RMG industry provides jobs for over 4 million people and contributes over 83 percent of the country’s total export receipts. So it is time for the government and all the banks to come forward to help all the textile and apparel entrepreneurs to sustain during this pandemic. In this regard, loan giving policy should not be tough, rather it should be friendly both for the big and small entrepreneurs.