Bangladesh’s slow release of interest subsidy hitting lending from Government’s stimulus funds, reports claim.
The export-oriented garment sector of the country, considered the backbone of its economy, has also been a beneficiary of the same.
However, it now seems the country’s economy might fail to benefit from the Government’s move as banks have, reportedly, lost the zeal to extend loans since interest subsidy was not paid out at the expected pace as initially thought.
This was underlined by recent media reports, which cited data from the country’s central bank in this regard.
According to data from Bangladesh Bank, banks and non-bank financial institutions in Bangladesh, as of 13 April of the current fiscal year, disbursed only 34.3 per cent of Taka 33,000 crore funds allocated for large industries, and the lenders loaned 45.7 per cent of Taka 20,000 crore set aside for the cottage, micro, small and medium enterprises (CMSMEs) between July and March, claimed media reports.
Reports further citing concerned officials from commercial banks and the central bank claimed lenders had not received any interest subsidy from the Government after December 2020, so they are not encouraged to disburse the loans.
