FBCCI forms sector-wise councils to help businesses borrow from stimulus packages
The country's apex trade body has begun forming sector-wise councils to expedite disbursement of the funds from the government-announced stimulus packages aimed at helping businesses and industries recover from the devastating impact of the global coronavirus pandemic.
The councils would help implement the stimulus packages and revive the economy from the fallout of the rogue virus-induced shutdown of economic activities since March 26.
"The FBCCI has been forming the sector-wise councils from last week so that banks can feel confident in disbursing the funds and borrowers can repay the loans," said Sheikh Fazle Fahim, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), at a virtual meeting at the chamber yesterday.
The objective is to implement the stimulus packages and prepare a roadmap to recovery for the next three years through policy support, government intervention, tax, VAT, customs tariff assistance coupled with the FBCCI's advocacy and members' collective efforts.
The move came as businesses complain that banks are not interested in lending money from the funds obtained from the stimulus packages.
The government has announced Tk 20,000 crore in stimulus packages for the micro, small and medium scale industries, Tk 30,000 crore for the large industries and Tk 5,000 crore for the export-oriented sector.
The central bank has so far taken seven stimulus packages worth nearly Tk 80,000 crore to revive the economy and banks will have to implement all of them. Banks will have to give out a good portion of the loans from their own sources.
However, banks are not disbursing the money to prospective borrowers from the funds because of the absence of a directive from head offices, proper documents and adequate liquidity, businessmen say, adding that if they do not get the money from the funds on time, there will be no use of such assistance later.
"Banks are not cooperating in the disbursement of the money from the funds," said Jasim Uddin, president of the Bangladesh Plastic Goods Manufacturers and Exporters Association.
Since banks are not releasing the money, the backward linkage industries like plastics, garment accessories, spinning, weaving and dyeing are facing fund shortage, he said at the virtual meeting.
At the same time, $3.5 billion forced loans have already been created in the banking sector because of payment to the foreign suppliers through back-to-back letters of credit, the entrepreneur said.
Banks are not paying even the matured bills due to the liquidity crisis in the financial sector, he said.
Abdus Salam Murshedy, president of the Bangladesh Exporters Association, suggested extending banking hours for quick disbursement of the funds from the bailout packages.
The large industries are also facing trouble in obtaining the money from the funds as banks are not interested, said Salahuddin Alamgir, a director of the FBCCI.
For instance, it takes nearly Tk 700 crore to set up a dyeing factory, but banks are not lending money for the capital-intensive industries, he said.