Businessmen oppose further lending rate hike
Businessmen yesterday urged the central bank governor again to keep the lending rate of commercial banks at existing 13 percent to maintain growth of the industrial sector.
A further rise in bank loan interest will hamper the growth of the industrial sector, because entrepreneurs are now facing gas and power supply crunches acutely, the businessmen said.
Owners' clubs of various private commercial banks have been lobbying the central bank and the ministry concerned for increasing the interest rate on bank loans, but businessmen opposed it.
Businessmen, small and medium entrepreneurs and leaders of different trade bodies expressed their concern on the proposed higher bank loan interest rates at a discussion on "Financing in the agro-based small and medium scale industrial sector" at the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) office.
Selina Quader, proprietor of Farm Fresh, said higher bank interest rates are a barrier to the growth of the business. She said the government should subsidise exports of potato so that farmers get proper prices.
Syed Mahbubur Rahman, managing director of BRAC Bank, said the life blood of the present economy is the SME sector. Around 62 percent employment is generated by the SME sector, he added.
Abdul Awal Mintoo, former FBCCI president, said the government should focus not only on the agro-processing industries, but also on agricultural production.
"We cannot go for agro-processing industries until and unless we produce the agri-products," Mintoo said.
While moderating the discussion, AK Azad, FBCCI president, said businessmen are frustrated over the issue of higher bank interest rates.
"I heard the interest rate on bank loans might be capped at 14 percent. But I think this rate is also high. I want the central bank should continue with the present interest rate ceiling at 13 percent," Azad said.
He said directors of many commercial banks also think the whole economy of the country cannot be affected to ensure the profit of a particular bank.
The private commercial banks invested in the stock market without maintaining any ceiling, which was not a right decision. The inflation rate is really high, he added.
At the discussion, Atiur Rahman, central bank governor, advised the small and medium entrepreneurs to produce more value added agricultural products for creating more employment for larger segments of people.
The governor also said the government has so far disbursed 65 percent of the targeted Tk 13,000 crore farm loans to the farmers for fiscal 2010-11.
He said the agriculture sector has also tended to turn into industries for increasing the number of entrepreneurs in the agro-processing industries, he added.
"So, the central bank is focusing on the development of both agriculture and industrial sectors," he said.
The central bank governor said the rising inflation is the biggest enemy of the farmers. "We are trying to rein in the growing inflation rate," he said.
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