Bangladesh Bank has announced a massive refinancing and support fund of Tk 600 billion to revive the economy, including the reopening of closed industrial factories.
Through this initiative, the central bank expects to create employment opportunities for more than 2.5 million people.
On Saturday, BB Governor Md Mostaqur Rahman made the announcement during a press conference held at the central bank's head office in Dhaka.
He stated that the country’s economic growth has consistently declined over the past three years.
While the GDP growth rate was previously 5.8 per cent, it later dropped to 4.2 per cent. Currently, it is projected to hit 3.7 per cent, he said.
At the same time, major blows have been dealt to the garments, textile, steel, ceramic, information technology, and manufacturing sectors, according to him
The governor added that pressure on the banking sector has intensified, non-performing loans (NPLs) have risen, money laundering incidents have occurred, and depositors' confidence has eroded.
High interest rates are also discouraging cottage, small, and medium entrepreneurs from expanding their businesses. This special scheme has been launched to tackle this situation and revitalize the economy, he added.
Out of the Tk 600 billion package announced by BB, Tk 410 billion will be distributed under refinancing schemes.
The remaining Tk 190 billion will be disbursed through various central bank-owned support programmes.
The governor said that the 5.0 billion allocated for the creative economy will be provided as a grant from the Corporate Social Responsibility (CSR) fund. This is not a loan.
Bangladesh Bank states that once this fund is fully operational, employment opportunities will be created for more than 2.5 million people.
In particular, it will revive industrial factories, increase agricultural production, expand exports, and bring new momentum to the rural economy.
The central bank also hopes that around 0.1 million job opportunities could be created from the Tk 10 billion allocated for overseas employment.
Loans for unemployed youth will be disbursed through the Karmasangsthan Bank.
On the other hand, loans for rural economic activities will be provided through the Ansar-VDP Bank.
Lakhs of Ansar and VDP members will benefit from this, it said.
The governor said that under the refinancing scheme, BB will provide funds at a 4.0 per cent interest rate. Banks will be allowed to maintain a maximum spread of 3.0 per cent. As a result, large borrowers will have the opportunity to get loans at a 7.0 per cent interest rate.
However, due to higher management costs for micro-credit, the interest rate might be slightly higher, he said.
He added that this rate could be relatively higher, especially in the case of small loans from the Karmashangsthan Bank.
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