Economic Reporter :
International Finance Corporation (IFC), the World Bank’s commercial arm for private sector, in a report identified access to finance and corruption as the major impediments to private investment in the country.
The report titled ‘Bangladesh’s Journey to Middle-Income Status: The Role of The Private Sector’ was launched at a function organised jointly by IFC and Metropolitan Chamber of Commerce and Industry (MCCI) on Wednesday.
It says 24 percent firms identified access to finance as top challenge while 18 percent cited corruption, 11 percent mentioned political instability and 9 percent mentioned informal competition.
Speaking on the occasion, Prime Minister’s Private Industry and Investment Adviser Salman Fazlur Rahman on Wednesday also hinted reducing the tax rate in the next national budget for 2020-2021 for expanding the trade and business across the country.
“The government is thinking to expand tax net instated of increasing the tax rate. Side by side, the government is likely to reduce tax rate in different sectors. There will be necessary directives in the next national budget,” he said.
Agreeing with some of the points in the report, Prime Minister’s Advisor for Private Industry and Investment Salman F Rahman said the government will be capping lending rate of banks to make financing available although the practice will be against the global norm.
“The capping on lending rate will be on experimental basis and after seeing the impact, the government will make the final decision,” he told the function, presided over by MCCI President Nihad Kabir, at the chamber office at Police Plaza Concord in the city.
The function was also addressed, among others, by Bangladesh Investment Development Authority (BIDA) Executive Chairman Sirazul Islam, eminent economist Dr Ahsan H Mansur, Apex Group Director Syed Nasim Manzur, Waker Chowdhury and former foreign secretary Faruk Sobhan.
Salman’s remarks came against the backdrop of the government’s move to introduce mandatory single digit lending rate up to 9 percent and deposit rate up to 6 percent in banks from April 1 this year.
About the private entrepreneurs’ complaints on the customs department’s attitude in releasing imported goods and allowing bonded warehouses, Salman said the private sector has to be self-criticised as there are allegations that imported goods are sold out in black market.
“If the private sector itself can evolve as a mechanism to check this unfair practice, then there will be a strong logic to allow bonded warehouse in private sector,” he said. World Bank’s economists Ali Zafar, Masrur Reaz, and Farida Tasin jointly conducted the study and prepared the report and made keynote presentation on it at the function.
The IFC report said access to finance could be enhanced through better performance of the banking sector, including the resolution of non-performing loans (NPLs), merging stronger and weaker banks, the streamlining of corporate bond and commercial borrowing approval processes, and setting up credit information sharing mechanism to promote bank lending to small and median enterprises (SMEs).
BIDA Executive Chairman Sirazul Islam said bureaucracy has to work within rules and regulations and they often do not understand the pain of the private sector.
International Finance Corporation (IFC), the World Bank’s commercial arm for private sector, in a report identified access to finance and corruption as the major impediments to private investment in the country.
The report titled ‘Bangladesh’s Journey to Middle-Income Status: The Role of The Private Sector’ was launched at a function organised jointly by IFC and Metropolitan Chamber of Commerce and Industry (MCCI) on Wednesday.
It says 24 percent firms identified access to finance as top challenge while 18 percent cited corruption, 11 percent mentioned political instability and 9 percent mentioned informal competition.
Speaking on the occasion, Prime Minister’s Private Industry and Investment Adviser Salman Fazlur Rahman on Wednesday also hinted reducing the tax rate in the next national budget for 2020-2021 for expanding the trade and business across the country.
“The government is thinking to expand tax net instated of increasing the tax rate. Side by side, the government is likely to reduce tax rate in different sectors. There will be necessary directives in the next national budget,” he said.
Agreeing with some of the points in the report, Prime Minister’s Advisor for Private Industry and Investment Salman F Rahman said the government will be capping lending rate of banks to make financing available although the practice will be against the global norm.
“The capping on lending rate will be on experimental basis and after seeing the impact, the government will make the final decision,” he told the function, presided over by MCCI President Nihad Kabir, at the chamber office at Police Plaza Concord in the city.
The function was also addressed, among others, by Bangladesh Investment Development Authority (BIDA) Executive Chairman Sirazul Islam, eminent economist Dr Ahsan H Mansur, Apex Group Director Syed Nasim Manzur, Waker Chowdhury and former foreign secretary Faruk Sobhan.
Salman’s remarks came against the backdrop of the government’s move to introduce mandatory single digit lending rate up to 9 percent and deposit rate up to 6 percent in banks from April 1 this year.
About the private entrepreneurs’ complaints on the customs department’s attitude in releasing imported goods and allowing bonded warehouses, Salman said the private sector has to be self-criticised as there are allegations that imported goods are sold out in black market.
“If the private sector itself can evolve as a mechanism to check this unfair practice, then there will be a strong logic to allow bonded warehouse in private sector,” he said. World Bank’s economists Ali Zafar, Masrur Reaz, and Farida Tasin jointly conducted the study and prepared the report and made keynote presentation on it at the function.
The IFC report said access to finance could be enhanced through better performance of the banking sector, including the resolution of non-performing loans (NPLs), merging stronger and weaker banks, the streamlining of corporate bond and commercial borrowing approval processes, and setting up credit information sharing mechanism to promote bank lending to small and median enterprises (SMEs).
BIDA Executive Chairman Sirazul Islam said bureaucracy has to work within rules and regulations and they often do not understand the pain of the private sector.
