Disbursement to remain largely unimplemented by Dec deadline

HM Murtuza | Published at 11:54pm on December 25, 2020

All scheduled banks have implemented 46.36 per cent of the stimulus package announced for cottage, micro, small and medium entrepreneurs’ with a handful of days remaining before the extended deadline fixed by the central bank to disburse the package expires.

The central bank has so far extended the deadline thrice till December 31 since it announced the stimulus package on April 13.

The BB, in line with the government announcement, floated a Tk 20,000-crore stimulus package in April to support the CMSME sector hit by the COVID-19 outbreak in the country.

The latest Bangladesh Bank data showed that the banks’ collective disbursement to 66,610 CMSMEs reached Tk 9,271 crore on December 17, indicating that the banks would fail to accomplish the target to disburse the remaining Tk 10,329 crore of the stimulus package by the December-31 deadline.

Although the banks had served the large industrial entrepreneurs better, they largely failed to take their services to the CMSMEs — the most vulnerable and needy sections of people — even after expiry of the first two deadlines.

Despite being a government initiative, state-owned banks had lagged behind the most among the banks with their disbursement reaching 36 per cent of the total stimulus amount.

As of December 17, the SoBs had disbursed Tk 939 crore against their stimulus loan disbursement target of Tk 2,593 crore.

A senior official of the central bank said that the banks had been very reluctant to ensure effective coordination in the stimulus loan disbursement through their rural branches or through branches in the suburbs.

Considering the target group or beneficiaries of the stimulus package for CMSMEs, better focus by the banks in those areas could have been helpful in reaching the CMSMEs and thus implementing the package in time, he said.

Kazi Suvro, an entrepreneur at Gournadi in Barishal, told New Age that no bank had shown any interest to support him when he approached a number of government-owned banks there to avail the stimulus loan for his light engineering business.

Bankers, however, continued to come up with excuses for slow implementation of the CMSME’s package, BB officials said.

The data showed that implementation of the package by Islami banks had reached 45.81 per cent as of December 17 against their target to disburse Tk 5,520 crore in loans by December 31.

Implementation by private banks, excluding Islami banks, had reached 46.3 per cent or Tk 5,000 crore against their Tk 10,779crore loan disbursement target.

Implementation by specialised banks and foreign banks had been better against the disbursement of the loans by the SoBs, Islami banks and private commercial banks.

Specialised banks and foreign banks had implemented 87 per cent and 50 per cent of their disbursement targets respectively, as per the data.

Specialised banks had disbursed Tk 250 crore against their Tk 288-crore disbursement target while foreign banks had disbursed Tk 97 crore against their Tk 195-crore target.

In an attempt to support the CMSMEs to recover from the adverse impacts of the coronavirus outbreak, the government announced the Tk 20,000-crore stimulus loans setting the interest rate at 9 per cent.

Of the 9 per cent interest, the government will bear 5 percentage points as subsidy and the remaining 4 percentage points are supposed to be borne by borrowers.

The banks had been initially asked to implement a lion share of the stimulus package within July and the remaining amount by August.