Remittance growth an ‘incredible event for Bangladesh’

The country's expatriates sent about 50 percent more remittance in July and August this year than last year despite the spread of deadly coronavirus pandemic, Finance Minister AHM Mustafa Kamal said on Wednesday (September 2). He termed the growth of remittance as an "incredible event of Bangladesh".

He made the remarks in reply to a question from a journalist after a virtual meeting of the Cabinet Committee on Public Procurement on Wednesday (September 2) at cabinet division auditorium.

Minister also said this was possible due to small incentives and initiatives to reduce the hassle of sending remittances legally. At the same time, the finance minister thanked the expatriates for sending remittances legally.

“The growth of remittance in July and August this year was 50 percent greater than previous year," he said.

“Last year was the highest earning year in terms of remittances. Last year, $18 billion in remittances came. This is an incredible increase of 50 percent over last year. What I got in six months has come in two months.”

"When I was the planning minister, I did a study on my own initiative. The study found that 51 percent of remittances came legally and 49 percent came illegally or through hundi. From then on, I started thinking that 100% of remittances should be legalized.”

"We want the entire amount of remittance income to be legalized. That’s why we did two things. One was to provide incentive at the rate of 2 percent on remittances. This incentive has worked to increase remittances," he said.

Regarding the second initiative, the minister said, “Sending remittance legally before was much more complicated. Many were complaining about the complications, so I made it easier.”

“There are no more complains about receiving remittance. No one lost any money sending remittance. That is why remittance has increased so much,” he pointed out.

Thanking the expats finance minister said, “Expatriates are supporting us by their hard-earned money. I thank them on behalf of the Prime Minister Sheikh Hasina.”

Addressing the value of sending money legally, he said, "If you (expats) send remittance legally, you will get the benefits one day or another.”

Meanwhile, according to the updated report published by Bangladesh Bank, remittance sent by expatriates in the second month of the current financial year in August was at $197.39 crore.

In Bangladeshi currency, the amount was 16,497 crore taka, which was 51.92 crore taka or 36 percent more than the same period last year. In August last year, expatriate Bangladeshis sent remittance worth $144.48 crore.

Besides, in July this year, expatriates sent remittance amounting to $259.95 crore. It was highest remittance collection for a single month in the history of Bangladesh.

Earlier, the highest record remittance came in June this year. In that month, remittances came to $173.30 crore.

SMEs not getting incentive package loan

The Finance minister further said Prime Minister Sheikh Hasina is now monitoring the loan disbursement situation under the incentive packages.

He said if the small businesses can prove they have been affected by the pandemic, they will get the benefit from the incentive package.

The central bank, Bangladesh Bank, is also looking into the allegations of SMEs being deprived of the loan package to overcome the pandemic shock, he said.

There are allegations that banks were not disbursing loans from the 20,000 taka working capital for SMEs.

The government will subsidize 5 percent of 9 percent interest rate on SME loans.

The remaining 4 percent will be paid by the borrowers.

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