Maintaining private sector credit growth biggest challenge: DCCI president

Dhaka Chamber of Commerce and Industry (DCCI) President Ashraf Ahmed has said maintaining the private sector credit growth will be the biggest challenge for the government this year. 

Addressing an event yesterday, he said, "With the depreciation of the taka, capital demand has surged by 30-40%. However, the Bangladesh Bank has set a modest target of 10% credit growth. This presents a significant challenge in meeting the capital demand. If not addressed, cost reduction may become necessary, inevitably impacting production and subsequently, growth. Moreover, employment opportunities could diminish. We are actively collaborating with the government to enhance credit flow."

The Capital Market Journalists' Forum (CMJF) organised the event "CMJF Talk" at the CMJF auditorium in the capital's Purana Paltan. 

CMJF President Golam Samdani Bhuiyan delivered the welcome address at the event moderated by its General Secretary Abu Ali.

The ongoing dollar shortage in the country has led to insufficient dollar liquidity in banks. This scarcity is exacerbating import issues and hindering efforts to resolve the import-related challenges, which, in turn, significantly impacts production levels

Ashraf Ahmed

DCCI president said Bangladesh aims to become a trillion-dollar economy by 2030, necessitating a growth of two and a half times the economy's size. Overcoming this challenge requires significant effort.

He said both the domestic and global economies have faced numerous challenges over the past one and a half to two years, particularly grappling with inflationary pressures.

"The ongoing dollar shortage in the country has led to insufficient dollar liquidity in banks. This scarcity is exacerbating import issues and hindering efforts to resolve the import-related challenges, which, in turn, significantly impacts production levels," Ashraf Ahmed said.

In response to a question regarding fund sourcing from the capital market amidst the slow pace of private loan growth, the DCCI president said that raising capital from the capital market is a time-consuming process and may not yield immediate results. Nevertheless, he mentioned its potential as a long-term strategy, highlighting the mandatory requirement for audit reports.

Regarding the implementation of various initiatives in this regard, he mentioned ongoing efforts to undertake several measures in this direction." Reputable issuers can participate in both bond and fixed deposit markets. While primary trading is observed in the bond market, secondary trading remains limited. Thus, there is a need to enhance investments by attracting more issuers to the market."

Addressing another inquiry regarding money laundering, the DCCI president said money laundering is not solely driven by economic factors. 

"The inherent nature of money is to seek high returns, irrespective of location. Investing domestically often yields higher returns than investing abroad. Therefore, money laundering cannot be solely attributed to economic motives, as there may be other underlying reasons," he said.

"We can work with the government on various policies. Many new industries are emerging. If the capacity of the existing Smart Bangladesh Vision can be increased, Bangladesh can become a trillion-dollar economy. However, if intellectual property rights are not retained, it will not be possible to develop knowledge-based properties," Ashraf Ahmed added.