Farmers, traders yet to get loans 3 months after stimulus launch

HM Murtuza with Rezaul Karim Manik in Lalmonirhat | Published: 22:44, Jul 11,2020


A file photo shows a farmer carrying newly-harvested jute plants on his shoulders at a field on the outskirts of Dhaka. Farmers, low-income group people and small‑time traders are yet to get loans from the Tk 3,000 crore stimulus package that the central bank launched in April in keeping with a government move to help marginal people affected by the COVID-19 outbreak. — New Age photo

Farmers, low-income group people and small-time traders are yet to get loans from the Tk 3,000 crore stimulus package that the central bank launched in April keeping to a government move to help marginal people affected by the COVID-19 outbreak.

The loans from the package are supposed to be disbursed through non-government organisations by banks at 9 per cent interest.

Farmers and local representatives of a number of districts said that they were yet to get any loans from the stimulus package while some of the NGOs had increased interest on loans disbursed by them.

BB officials said that only five banks had sanctioned Tk 314 crore in total to several NGOs, but the loans were yet to be disbursed to the NGOs, resulting in the delay in distribution to the beneficiaries.

Farmers in Bogura and Lalmonirhat, well known for agricultural production, told New Age that the NGOs operating in their areas were yet to start disbursement of loans to the eligible individuals even though some of them approached the NGOs to get the facility.

NGO officials said that they were yet to receive any stimulus fund for disbursement among farmers and small businesses.

Farmers Asan Sheikh and Ashraf Ali from Biroli of Sherpur in Bogura told New Age that they had not got any offer from any NGO for loans at 9 per cent interest.

‘In some cases, the NGOs have raised the lending rate,’ Asan said.

Abdul Hossen and Abdul Hakim, farmers from Candimari of Aditmari in Lalmonirhat, also said that they were not offered any such loans by the NGOs.

Lalmonirhat’s Mohishkhocha union chairman Md Mosaddak Hossen Chowdhury said that many of the people under his union had lost everything due to river erosion in the recent weeks, but none of them received loans at 9 per cent interest under the government’s stimulus package.

NGO Asa’s Lalmonirhat district manager Moklesur Rahman told New Age that he had not yet received any instruction to disburse loans at 9 per cent interest.

BB officials said that so far, BRAC Bank had sanctioned the highest Tk 155 crore to the NGOs for implementation of the stimulus package.

Pubali Bank and Shahjalal Islami Bank each sanctioned Tk 50 crore to the NGOs while NRB Commercial Bank sanctioned Tk 32 crore and Rupali Bank sanctioned Tk 27 crore in this regard.

NRB Commercial Bank chairman Tamal Parvez said that the bank had received applications from 26 NGOs and sanctioned loans to 14 of them.

The fund would be disbursed upon completion of the required scrutiny, he said.

He also mentioned that the bank had planned to disburse Tk 242 crore to the NGOs as part of disbursement of the Tk 3,000-crore stimulus.

An official of the central bank said that 42 banks had already signed memoranda of understanding with the BB to get refinance for implementation of the Tk 3,000-crore stimulus package.

He said that significant progress would be visible in the next couple of months as the banks were already prepared to implement it.

Apart from the banks, the preparedness of the NGOs was another vital issue as certification from the Microcredit Regulatory Authority was a requirement for them to get access to the fund.

The number of MRA certified NGOs eligible for disbursement of the stimulus loans had reached 191 till Wednesday last week and the number would increase further.

Meanwhile, 25 banks placed demands for Tk 2,431 crore in refinance fund over a BB query asking them how much funds they would require by the end of December this year.

The BB launched the refinance fund in addition to a Tk 5,000 crore refinance fund for the farmers, which would be disbursed through the banking channel at 4 per cent interest to reach the unbanked population of the country.

Under the policy set by the central bank for the refinance loans, the banks would receive money from the fund at 1 per cent interest.

For a single individual, the borrowing limit from the NGOs will be Tk 75,000 and the limit will be Tk 3 lakh for a group of at least five individuals.

The NGOs’ lending limit to a single small-time entrepreneur has been set at Tk 10 lakh while the limit is Tk 30 lakh for a joint project comprising a group of at least five members.

The borrowing capacity would increase proportionately with the increase in members in any group.

As per the BB’s estimation, the fund would enable around four lakh individuals to get loans to overcome the negative effects of the coronavirus pandemic.

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