At a pre-budget discussion business people and experts have called for specific guidelines in the next budget for economic recovery as the second wave of Covid-19 has hit the country. The government must consider incentives for the pandemic-hit businesses, especially cottage, micro, small and medium enterprises (CMSMEs) and their loan repayment period from the stimulus package should be extended by two years as those firms have been severely impacted by the pandemic, they said.
Dhaka Chamber of Commerce and Industry (DCCI) on Saturday organised the pre-budget discussion for the fiscal 2021-2022 virtually to outline the needs in the key macroeconomic avenues and roadmap of trade, industrial, and investment recovery as well as turn around the private sector from pandemic adversities. According to a news report published in this daily on Sunday, the leading business chamber went on to suggest the forming of a national database of the CMSMEs in the country to ensure transparency in disbursements. Since firms in the sector face numerous difficulties when availing loans from the stimulus package, it proposed for approval of funding with national identity cards being the only required document.
Experts have said the pandemic has hit all businesses hard, but while the big industries are recovering quite well, small businesses are still struggling. As the unequal access to stimulus packages will have lasting impact on the national economy, the government must immediately inquire into the failure of the banking sector in disbursing the loan made available for SMEs. In this respect, the central bank cannot avoid its responsibility and must do more to remove all regulatory and circumstantial barriers and to get the banks to speed up loan disbursement among the small businesses.
As reported, the experts suggested that the government should consider mobile financial services as a platform for disbursing loans to the CMSMEs as banks fear the risks.
We do not find it unreasonable at a time of an acute financial crisis that loan recovery period should be relaxed to give the businessmen an opportunity to survive. Loan recovery by destroying the business has many unwelcome ramifications. There will be loss of jobs when unemployment is alarming. The process of closing a business for loan recovery is complicated and time consuming. In most cases the easy thing is done by starting corruption cases. The businessman is put in jail and nothing happens about realisation of the debt. No negotiation is possible because the loanee is under arrest. To put sense in the recovery of a bad loan is a near impossibility for all round corruption.
