Business leaders urge six-month loan overdue period, lower lending rates to 12%
Business leaders call for financing support for struggling but operational industries instead of shuttered factories
Business leaders have urged the central bank to extend the loan overdue classification period from three months to six months and reduce bank lending rates to 11-12% to help industries survive mounting economic pressures.
The demands were raised during a meeting in Dhaka today (12 May) between a delegation of the Bangladesh Chamber of Industries (BCI), led by its President Anwar-Ul-Alam Chowdhury Parvez, and Bangladesh Bank Governor Md Mostaqur Rahman.
According to the business leaders, loans are currently being classified as default after just three months of overdue payments, which they say is creating additional pressure on businesses already struggling with high borrowing costs and weak market conditions.
Keep updated, follow The Business Standard's Google news channel
They also noted that bank lending rates have climbed to 14-15%, making it extremely difficult for businesses to operate profitably with borrowed funds. The delegation urged the central bank to bring lending rates down to within 11-12%.
Speaking to reporters after the meeting, BCI President Parvez said the country's manufacturing sector has been hit hard by high interest rates, gas supply shortages, dollar pressures, inflation, and declining consumer demand.
He said many industries are facing severe liquidity shortages, particularly since the Covid-19 pandemic, when a working capital crisis began to emerge. The situation later worsened due to currency depreciation, rising interest rates, and elevated inflation.
The business leaders argued that instead of financing factories that have already shut down, policymakers should prioritise support for weak but still-operational industries to protect industrial output and employment.
They also called for increased working capital support, lower penal interest charges, and expanded foreign refinancing facilities to help businesses stay afloat.
Parvez said the current government also recognises that sustaining the industrial sector is essential for strengthening the economy.
"We have proposed several measures to the governor so that existing factories can remain operational and become stronger," he said.
Among those present at the meeting were former FBCCI presidents Mir Nasir Hossain and Jashim Uddin, former BCI president Mostafa Azad Chowdhury, Meghna Group of Industries Chairman Mostafa Kamal, Transcom Group CEO Simeen Rahman, BCMEA Chairman Moinul Islam Swapan, BMAMA President Matiur Rahman, and BGAPMEA President Mohammad Shahriar.
