Kazi Zahidul Hasan :
The growth in the private sector credit has increased by 14.4 per cent during January to April this year in the wake of improvement in the demand of working capital loans from the businessmen, officials said.
They said the ongoing clam in the country’s political arena has boosted confidence of the business community resulting rise in bank lending to the private sector.
According to a Bangladesh Bank (BB) statistics, the private sector credit disbursement from the scheduled banks rose to Tk 5.27 lakh crore during January-April period of the current year as against Tk 4.80 lakh crore during the corresponding period of the last year, showing a 14.4 per cent growth.
Bank lending to the private sector remained stagnant for the last couple of years due to the uneven political situation in the country, creating a credit crunch in the banking sector.
“The rising trend of private sector credit off-take is indicating some level of recovery in aggregate demand in the economy supported by an apparent clam in the country’s political arena,” M Mahfuzur Rahman, Executive Director of BB told The New Nation on Tuesday.
He said, corporate and industrial borrowers are looking forward for their expansion related activities and an increasing participation in commodity import by private sector entrepreneurs pushed up the demand for working capital loans.
“The current trend of export and import suggests that the private sector credit flow will increase further if the current political deadlock ends to a longer stability,” he noted.
“Things are slowly starting to improve and banks are lending more,” M Farid Uddin Ahmed, Managing Director of Rupali Bank told The New Nation yesterday.
He said, the lending growth is yet to reach the optimum level. “We have to increase lending on productive sectors including SMEs and export-oriented industries to boost the economic activities in the country.
Businessmen however said that although the private sector credit demand is showing signs of improvement, available bank finance is too expensive.
“Lending margins by the banks are still too high. This leaves businesses struggling to find appropriate finance to deal with cash flow problems or make capital investments,” a garment exporter told The New Nation on condition on anonymity.
He also said that demand for loans is increasing, but the banks are generally not granting new requests unless they are from existing customers with a good track record and security. That’s leaving many smaller businesses to hardship in running their production.
“The prospect of more investment in various productive sectors is high if the banks take steps in lowering lending margins, he added.
BB in its monetary policy has fixed the private sector credit growth at 15 per cent for January to June period of the current calendar year.
The growth in the private sector credit has increased by 14.4 per cent during January to April this year in the wake of improvement in the demand of working capital loans from the businessmen, officials said.
They said the ongoing clam in the country’s political arena has boosted confidence of the business community resulting rise in bank lending to the private sector.
According to a Bangladesh Bank (BB) statistics, the private sector credit disbursement from the scheduled banks rose to Tk 5.27 lakh crore during January-April period of the current year as against Tk 4.80 lakh crore during the corresponding period of the last year, showing a 14.4 per cent growth.
Bank lending to the private sector remained stagnant for the last couple of years due to the uneven political situation in the country, creating a credit crunch in the banking sector.
“The rising trend of private sector credit off-take is indicating some level of recovery in aggregate demand in the economy supported by an apparent clam in the country’s political arena,” M Mahfuzur Rahman, Executive Director of BB told The New Nation on Tuesday.
He said, corporate and industrial borrowers are looking forward for their expansion related activities and an increasing participation in commodity import by private sector entrepreneurs pushed up the demand for working capital loans.
“The current trend of export and import suggests that the private sector credit flow will increase further if the current political deadlock ends to a longer stability,” he noted.
“Things are slowly starting to improve and banks are lending more,” M Farid Uddin Ahmed, Managing Director of Rupali Bank told The New Nation yesterday.
He said, the lending growth is yet to reach the optimum level. “We have to increase lending on productive sectors including SMEs and export-oriented industries to boost the economic activities in the country.
Businessmen however said that although the private sector credit demand is showing signs of improvement, available bank finance is too expensive.
“Lending margins by the banks are still too high. This leaves businesses struggling to find appropriate finance to deal with cash flow problems or make capital investments,” a garment exporter told The New Nation on condition on anonymity.
He also said that demand for loans is increasing, but the banks are generally not granting new requests unless they are from existing customers with a good track record and security. That’s leaving many smaller businesses to hardship in running their production.
“The prospect of more investment in various productive sectors is high if the banks take steps in lowering lending margins, he added.
BB in its monetary policy has fixed the private sector credit growth at 15 per cent for January to June period of the current calendar year.
