Home ›› 03 Jul 2022 ›› Front
The disbursement rate of money from the 28 government-announced incentive packages has been good for major industrial companies but small enterprises have been less fortunate, according to a Bangladesh Bank (BB) report.
Under those packages, the government had allocated more than Tk 2,00,000 crore for the country’s economic recovery amid the Covid-19 pandemic, at the height of which all types of businesses were shocked to their core after incurring massive losses.
At the end of March this year, almost 100 per cent of the incentive packages meant for export-oriented and large-scale industries were disbursed, according to the recently published report, titled “Policy Measures of Bangladesh Bank in Response to the Covid-19 Pandemic.”
But, its data showed that the disbursement of incentives meant for the cottage, micro, small and medium enterprises (CMSMEs), modernization of agriculture, tourism sector and workers were below 50 per cent.
Two incentive packages, Tk 20,000 crore each, were announced in two phases for the CMSME sector, which generates the maximum number of jobs in the county, but their disbursement rates have not been promising.
In the first phase, Tk 15,386 crore (76.93 per cent) was disbursed as working capital loans for CMSMEs. In the second phase, Tk 8,880 crore (44.40 per cent) was disbursed till March this year, said the BB report.
On the other hand, in both phases, the working capital loan disbursement rate for large industries and the service sector were 99 per cent and 35 per cent, respectively.
The sizes of the incentive packages for these two sectors were Tk 40,000 crore and Tk 30,000 crore, from which Tk 32,724 crore and Tk 10,787 crore were disbursed, respectively.
Meanwhile, from the Tk 5,000 crore stimulus package announced for salaries and allowances of the staff and workers in the active export-oriented industries, Tk 4,935 crore (98.7 per cent) was disbursed till the end of March.
In this regard, Centre for Policy Dialogue Executive Director Fahmida Khatun told The Business Post that banks do not want to give loans to CMSMEs due to a lack of proper documents and the high cost of funds.
“But since big industries do not have this problem, banks feel comfortable clearing their loans. That’s why the implementation rates of their packages are good,” she said.
If the CMSME sector does not get proper support, economic recovery will become a problem. BB needs to implement the group loan and digital loan programs for the small industries, she added.
Meanwhile, from the Tk 1,500 crore package for social security activities for underprivileged workers in the export-oriented garments, leather products and footwear industries, a meagre Tk 6.79 crore (0.45 per cent) was disbursed among 7,549 workers till March this year, said the report.
To facilitate the tourism sector, a working capital loan facility worth Tk 1,000 crore has also been created to pay the salaries and allowances of employees at hotels/motels/theme parks under a package.
Commercial banks are supposed to provide loans to business entities from their funds at an 8 per cent interest rate, of which, 4 per cent shall be subsidised by the government.
Although the package was launched in June last year, loan disbursement till March was only Tk 70 lakh, with an implementation rate of 7 per cent.
There is another package that has seen less implementation during the same period. Tk 5,000 crore was allocated for the Pre-shipment Credit Refinancing Scheme and only Tk 636 crore (12.72 per cent) has been disbursed.
Meanwhile, only Tk 503 crore (15.62 per cent) has been disbursed from a Tk 3,220 crore incentive package meant to provide support for farm mechanization.
Till the end of March, the packages that saw nearly 80 per cent implementation rates include Tk 2,500 per person cash assistance to daily labourers, cash distribution among the targeted population, subsidy for agriculture, special honorarium for doctors, nurses, medical workers and the refinancing scheme for low-income group people.
