Back to the drawing board: Stakeholders' dialogue on quicker fund flow from stimulus packages

Amid slow disbursement of Covid-19 stimulus packages, the government has decided to hold dialogues with trade groups, banks, and the ministries concerned to find a way forward, officials said.

The finance division will hold a three-day event at Osmani Memorial Auditorium in the capital later this month and early next month. Senior finance secretary Abdur Rouf Talukder will chair the meeting.

"We will listen to both the stakeholders and the bankers on how the execution of incentives package can be fast-tracked," a senior finance division official told the FE.

Heads of chambers and associations, policymakers, borrowers, and heads of think tanks will be invited so that they can describe the actual situation of the recovery package implementation and the barriers.

The finance division is holding the dialogue instructed by the government high-ups, after it submitted last week a progress report on stimulus package implementation before the cabinet.

Earlier, the cabinet division had asked the finance ministry to find a way out as the micro, small and medium enterprises (MSMEs) have been alleging that they are not getting the required loans from the stimulus money.

Banking data also showed that the MSMEs were not getting loans from the recovery packages earmarked for them.

The government has so far announced 21 stimulus packages worth Tk 1.13 trillion to help the businesses and affected people recover from the pandemic shocks.

Until September 30, only Tk 48.23 billion was disbursed among the smaller enterprises from the Tk 200 billion package announced for the sector, according to available data.

On the other hand, out of Tk 330 billion, as much as Tk 213.29 billion was disbursed from the package set aside as working capital to the affected industrial and service sector enterprises.

Of $5.0 billion Export Development Fund, so far $4.7 billion has been disbursed for the export sector. From the Tk 50 billion pre-shipment credit refinance scheme, so far some Tk 166 million has been released.

The entire amount of Tk 50 billion package for the export-oriented industrial units has been disbursed, mostly given to provide salaries to the apparel sector workers.

No money so far has been disbursed from the Tk 1.0 billion package for doctors, nurses, and health workers' honorarium.

Only Tk 85 million was disbursed among the government employees who died of Covid-19 as part of health insurance and life insurance.

Of the Tk 25 billion incentive packages for distributing rice, baby food, and other foods, only Tk 10.67 billion was disbursed until September. The government could distribute Tk 8.8 billion out of Tk 12.58 billion package announced for poor families with Tk 2,500 in cash support each.

A senior financial institution division official said the MSMEs do not maintain required bank accounts and ledgers and their credit history is not available, thus the banks feel shy to lend them money.

He said the managing director of Sonali Bank was asked to prepare a special policy to facilitate quick sanction of loans from the incentive packages, as the traditional loan system is not found friendlier for the implementation of the packages.

The official expressed the hope that the loan disbursement would pick up the expected pace as soon as the policy is framed.

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