Restaurants may get a bite of latest stimulus

Shahin Howlader

The Bangladesh Bank has said restaurant owners might be able to avail loans from the recently-announced Tk 1,000 crore stimulus package targeting only hotels, motels and theme parks.

“Loan disbursement will depend on the banks. They will approve loans to clients who they believe will not default,” Bangladesh Bank General Manager Ali Akbar Faraji told The Business Post.

“Not only hotels, motels and theme parks, but restaurant owners will be able to avail loan,” he said.

Earlier, a central bank circular specifically mentioned that loans from the stimulus package can only be used by hotel, motel and theme park owners for paying salaries of their employees amid the Covid-19 pandemic.

However, the loan limit for a particular client is yet to decided, and the banks will place their proposal within July 25 over the investment limit.

“The size of an enterprise does not matter. All of them, who have permission to do business, can avail the opportunity,” BB Executive Director Serajul Islam, also the central bank’s spokesperson, said.

However, stakeholders say that the stimulus package announced by the government will not be able to meet the demands of the country’s hotel sector.

“There are around 10,000 to 15,000 employees working in room service only at hotels and guest houses. Hotels and guest houses need around Tk 1,400 crore to pay salaries of their employees. And the banks must disburse the loan mortgage free,” Bangladesh Hotel and Guest House Owner’s Association President Saif Ahmed told The Business Post.

He put emphasis on the proper disbursement of the package among small, medium and large enterprises.

“We always find that large businesses are getting the government support, not the smaller ones. Thus, 90 per cent of hotel and guest house businesses, which ranges from single star to 3-star, are yet to receive any loan facility from the government,” he said.

Salehuddin Ahmed, former governor of Bangladesh Bank, welcomed the initiative, saying, “What needs to be ensured now is to make the loans available for organisations of all size.”

“It also needs to be ensured that the loans taken from the package is not spent elsewhere by business owners, and that it fulfils its true purpose,” he added.

Meanwhile, business owners welcomed the government move saying that the stimulus package would help their sector to recover from the coronavirus-induced hardship.

“I was forced to lay-off half of my employees in last two months due to long time closure of my theme park. Like me, many other entrepreneurs are facing the same problem amid an economic loss,” said Green Ville Cafe and Restaurant Managing Director Zakir Hossain.

“We hope that businesses will be able to overcome the situation if the loan is disbursed properly, he added.

The Bangladesh Bank on Thursday declared a fresh stimulus package of Tk 1,000 crore for hotel, motel and theme park, hit by the ongoing Covid-19 pandemic.

The owners of the business entities will be able to receive fund from the package at 4 per cent interest rate, the central bank said in a circular.

The disbursing banks, nevertheless, will enjoy 8 per cent interest rate and the government will pay the remaining 4 per cent as subsidy.

The repayment tenure of the fund is maximum one year, said the BB circular.

Earlier, the government announced 23 stimulus packages for different sectors in a bid to help them recover from the negative impact of the pandemic.