Low-cost loans from stimulus packages not going like hot cakes
Four banks have got approval from the central bank to give out Tk 1,044.90 under the stimulus package of Tk 30,000 crore for large industries and service sectors.
The banks -- Sonali, Rupali, EXIM and IFIC -- have given the fund to seven companies, according to data from the Bangladesh Bank.
Sonali Bank disbursed Tk 1,000 crore to Biman Bangladesh Airlines, Rupali Tk 4.50 crore to Universal Medical College and Tk 5.70 crore to Planet Resource.
EXIM Bank gave out Tk 30 to Arosha Janashakti and IFIC Tk 1.35 crore to Next Accessories, Tk 1.70 crore to Roni Neat Composite and Tk 1.5 crore to Neat Concern Printing.
Banks will be allowed to enjoy a portion of the fund of their disbursed loans from the central bank' refinance scheme of Tk 15,000 crore for large industries and service sector.
Sonali Bank, however, will not apply to the central bank for the refinance fund for the disbursed loans to Biman, said its managing director Ataur Rahman Prodhan.
The state-run lender is now scrutinising another 16 applications to get the prior approval from the central bank.
Banks will be allowed to get an interest subsidy of 4.50 per cent for the disbursed loans, which the end-users will get at 9 per cent.
But lenders will have to wait a little longer to enjoy the funds from the refinance scheme of the package as their participation agreements with the central bank are yet to be signed.
A total of 46 banks and 23 non-bank financial institutions have so far applied to the central bank for the refinance fund.
But no lender has yet to disburse any loan under the stimulus package of Tk 20,000 crore for small and medium enterprises, a central bank official said.
He said that lenders had initially shown reluctance to use the stimulus package due to the lower interest rate.
The SME loan in the form of working capital will be given at 9 per cent interest rate. Of the interest rate, 4 per cent will be borne by the borrowers and 5 per cent by the government, according to one guideline.
But banks will not enjoy their desired profit from the stimulus package as they have to face more operational costs for SME credits than that of other loans.
Against the backdrop, the central bank declared on April 27 that it will provide half of the Tk 20,000 crore stimulus package for the sector.
This has encouraged banks to a great extent to provide loans to the SME sector, the BB official said.
A total of 33 banks and NBFIs have so far signed participation agreements with the BB to use the refinance fund.
The BB official hopes banks will take initiative to disburse the loans within the shortest possible time.
The central bank does not know anything yet on whether the lenders have disbursed any fund under the refinance scheme of Tk 5,000 crore for agro-based small and medium businesses.
Banks will have to inform the central bank within the first week of this month to this end.
No fund has yet to be disbursed from another refinance scheme of Tk 3,000 crore for the marginal businesses and farmers.
But banks are now taking preparation to give out loans under the stimulus package as 24 lenders have already signed agreements with the central bank to use the fund, said another central bank official.
Some nine banks have also applied for the fund.
"We think that the whole process will be completed soon and both the marginal and deprived businesses will get loans in the quickest possible time," the BB official said.
But banks said borrowers are still less enthusiastic about taking loans at this moment to run their businesses.
Sonali Bank MD Ataur Rahman Prodhan said his bank had not got expected response from borrowers for funds from the stimulus packages.
"Businesses are now playing a wait-and-watch game," said Syed Mahbubur Rahman, managing director of Mutual Trust Bank.
The lender has so far received only 30-35 applications for loans from stimulus packages, he said.
"The economy has just reopened. And this will play a role in helping borrowers decide on whether to take loans or not," said Rahman, also the immediate past chairman of the Association of Bankers, Bangladesh, a forum of managing directors of banks.
He, however, said banks are ready to sanction loans and forward the applications to the central bank.
Shah Md Moinuddin, deputy managing director of IFIC Bank, echoed the same.
The bank has got only 5-6 applications from borrowers.