The number of loan defaulters in Bangladesh will rise by nearly 50 per cent if the government does not extend the moratorium deadline and relax the repayment facilities, Federation of Bangladesh Chambers of Commerce and Industry President Md Jashim Uddin said on Saturday.
The Bangladesh Bank had issued a notice last year allowing banks to keep CMSME sector loans unclassified if the borrowers clear 15 per cent of the overdue amount for the January-December period of 2021.
This facility has since expired, and the FBCCI seeks an extension for repaying loan instalments till June this year, says a press release.
Jashim Uddin, while addressing a view exchange titled “Council of Chamber Presidents – 2022” at the FBCCI auditorium in Dhaka, further said, “The Bangladesh Bank authorities have recently said they will not extend the moratorium.
“The government should do research on why bad loans go up. There are more than 30 per cent bad loans in the country, and no small businesses are loan defaulters, rather big businesses are.”
He continued, “The private sector is leading Bangladesh’s economy with around 80 per cent contributions. Why is the National Board of Revenue pushing to form VAT and tax laws? Big companies have benefited more from VAT and tax laws that impact small businesses.
“Banks are reluctant to provide small loans to small and medium enterprises. We are proud of the upcoming LDC graduation. The government is setting up economic zones, but did we form any policy on how these zones will run? So we have to emphasise more on capacity building.”
The FBCCI president said the sectors that shut their business activities, following government instructions to tackle the Covid-19 pandemic, had not yet received incentive loans.
“Small and medium entrepreneurs have been affected the most by the pandemic. While other incentive funds were almost 100 per cent disbursed, a large portion of SME incentives were not distributed. The repayment period should be extended to expedite the recovery,” he added.
At the event, industry leaders urged the government to ensure a business-friendly environment in the country while forming industrial policies, creating a national database, and providing a harassment-free VAT and tax collection system.
At the meeting, representatives of district chambers called on the FBCCI to form a special cell to deal with the NBR properly so that businesses are not harassed by VAT and tax officials.
They pointed out that 33 licences are needed to set up a factory, and entrepreneurs have to suffer a lot to get these certificates. The introduction of a “One Stop Service” will solve this problem.
Bangladesh Chamber of Industries President Anwar-ul Alam Chowdhury said if the government further increases the prices of gas and electricity, it will weaken the businesses.
Dhaka Chamber of Commerce and Industry (DCCI) President Rizwan Rahman said the government should put more emphasis on automation to ensure hassle-free VAT and tax collection.
“We need a national database to revive the small and medium businesses,” he added.
Patuakhali Women Chamber of Commerce and Industry President Ismat Jerin Khan said as the government is focusing on the rural economy, the deadline for repaying incentive instalments should be extended.
FBCCI Senior Vice-President Mostofa Azad Chowdhury Babu moderated the programme.
