FBCCI smells rat in stimulus loan disbursement

There are irregularities in disbursing loans under the government-announced Covid-19 stimulus package as the small and medium entrepreneurs are not getting this money while bankers are giving it to their relatives or some MPs and ministers' recommended applicants, businesses alleged.

On the other hand, Jashim Uddin, president of the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI), said at least 40% to 50% businesses will become defaulter if they are not given six months more time to repay instalments of the stimulus loans.

 "Some people are sabotaging the stimulus loan distribution. We need to identify them," he said.

The allegations came Saturday at a business meeting of the FBCCI at the Federation Bhaban in the capital.

Business leaders of district, city and chambers of women entrepreneurs from all over the country addressed the meeting.  

"Banks are reluctant to provide small loans to small and medium enterprises as they think it is not profitable to provide small loans," Jashim Uddin said.

Regarding bank's policy that lending to big business sector reduces the manpower and cost of the bank, Jashim Uddin said, this idea is wrong, rather it increases the risk of bad debt.

The FBCCI president said the sectors whose business activities were shut down under the instruction of the government to control the coronavirus pandemic have not yet received incentive loans.

Small and medium entrepreneurs have been among the most affected by the pandemic. But while other incentive funds were almost 100% discounted, a large portion of SME incentives were not distributed, he added.

"The small businesses are not getting the loans of the stimulus package. Bank managers are giving it as per their wish or to their relatives," alleged senior vice president of Nilphamari Chamber of Commerce and Industry Farhanul Haque.

Echoing him, another businessman from Dinajpur Chamber of Commerce and Industry President Reza Humayun Faruk Chowdhury Shamim said those who have connections with high ups or are linked with MPs and ministers get the loan.

The FBCCI president told them to provide specific information on their claims.

"We are shocked that Bangladesh Bank has asked to repay the loans within an exact time and in a specific amount. About 40% to 50% will become bankrupt then," Jashim Uddin said.  

He said that some banks have got about 80% to 90% repayment.

"Bangladesh Bank's policy support is now even more needed to overcome the pandemic recession. Otherwise, it will be difficult for business, trade and economy to recover," he said.

As per the instruction of BB, those who will repay at least 25% of all loans by December last year will not become defaulter. But FBCCI requested to extend the time for six months in a letter sent in December which the BB has not yet implemented. 

But BB has again instructed to repay at least 15% of the loans to avoid defaulting within the stipulated time.

The businesses also alleged that they were being seriously harassed by the revenue department people in the name of VAT, tax and duty.

A representative of the Bagerhat Chamber of Commerce and Industry said the people from VAT section harass by using various loopholes in the law. Those issues are comprehensible to the lawyers only not a general businessman, he added.

Citing some articles of the tax law, President of Chittagong Chamber of Commerce and Industry Mahbubul Alam said there are both loss and profit in business. But it is not logical to pay income tax for years.

Besides, he raised the issues of time loss due to HS code complexities and examination of products and valuation of imported products at the Chattogram Port. 

Narsingdi Chamber representative said the spirit of VAT is tax on the added value. But now VAT is being imposed on the turnover. The officials from VAT office take away the papers. There are 26 businesses in Narsingdi against whom they have filed cases, he added. 

Another businessman alleged that different official has different rules. The field officers deposit Tk3 crore to the public exchequer and takes Tk3 crore for him. VAT officers are becoming rich this way, he added.

They urged the FBCCI to solve the problems with the NBR.