Cenbank announces Tk60,000cr stimulus package to revive closed factories
At the customer level, the interest rate on loans for large industries will be 7%, while rates for smaller borrowers may be slightly higher.
The Bangladesh Bank has announced a Tk60,000 crore stimulus package to help revive closed factories, aiming to boost production, support exports, private sector development, employment generation, and economic revival amid ongoing economic challenges.
"Of this, Tk41,000 crore will be used to refinance and reopen the factories. Bangladesh Bank will provide Tk19,000 crore from its own fund," Governor Md Mostaqur Rahman disclosed during a briefing at the central bank headquarters in Dhaka's Motijheel today (23 May).
Additionally, he also said that at the customer level, the interest rate on loans for large industries will be 7%, while rates for smaller borrowers may be slightly higher.
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The package aims to create 2.5 million jobs, according to the presentation shared at the briefing.
How the Tk60,000cr is organised
The refinancing fund worth Tk41,000 crore will be sourced from commercial banks with excess liquidity, utilising long-term deposits of three years or more at 10% interest rate.
The outlay is as follows:
- Closed Industry & Service Sector: Tk20,000cr
- Agricultural & Rural Activities: Tk10,000cr
- CMSME (Cottage, Micro, Small, and Medium Enterprises) Sector: Tk5,000cr
- Export Diversification: Tk3,000cr
- North Bengal Agricultural Hub: Tk3,000cr
Meanwhile, subject to being backed by a government guarantee, the central bank has announced the provision of Tk19,000 crore for the stimulus package. The outlay for which is as follows:
- Pre-Shipment Credit Refinancing: Tk5,000cr
- Cottage & Micro Entrepreneurs: Tk5,000cr
- Leather Goods & Shoes Export: Tk2,000cr
- Frozen Shrimp & Fish Export: Tk2,000cr
- Unemployed Youth Employment: Tk1,000cr
- Rural Economic Activities: Tk1,000cr
- Green & Eco-Friendly Fund: Tk1,000cr
- Overseas Employment: Tk1,000cr
- Startup Funding: Tk500cr
- Creative Economy: Tk500cr
According to the central bank, the package is expected to:
- Reopen closed factories, create new production capacity
- Increase agricultural production nationwide
- Send skilled workers abroad, increase remittance inflows
- Expand environmentally friendly projects and initiatives
- Accelerate rural economic activities at the grassroots
- Boost creative and innovative activities nationwide
- Overall growth acceleration across all sectors
- Generate approximately 2.5 million direct & indirect jobs
"This facility will be available to businesses that were operational but became distressed due to post-Covid disruptions, the Russia-Ukraine war, and volatility in the foreign exchange market," a senior Bangladesh Bank official, on condition of anonymity, told The Business Standard recently.
The official added that priority will be given to firms with confirmed orders and market demand for their products to ensure effective utilisation of the funds.
Bangladesh Bank has already collected data from trade bodies and banks on closed and partially operational factories. Officials said more than 1,200 such industrial units have been identified, including both large borrowers and smaller firms.
