Shipbuilding industry to get loans at 4.5% interest

The Bangladesh Bank has set up a refinancing scheme of Tk2,000 crore to provide entrepreneurs in the shipbuilding industry with low-interest loans for the development of this sector to reduce the country's import dependence.

In a circular on Thursday, the central bank said borrowers in this sector will get the loan at an interest rate of only 4.5%.

The central bank asked lenders to decide loan limits based on the relationship between banks and customers. The loan will be repaid in 12 years with a grace period of three years. Under this central bank's refinancing scheme of Tk2,000 crore for this sector, all banks will be able to collect money and disburse it as loans.

At the bank level, the interest rate will be 1%. But, the Bangladesh Bank has asked lenders to provide the necessary information for lending to customers by 30 January 2024, it added.

According to the directive, banks will collect funds for the scheme and disburse loans in line with the target of the Shipbuilding Industry Development Policy 2021. Special emphasis will be given to sustainable development of the shipbuilding industry, increase in export earnings and employment and reduction of import dependence.

Banks interested in disbursing refinancing loans will be able to collect funds for the scheme by entering into a partnership agreement with the Bangladesh Bank, the directive added.

Under this scheme, banks will be able to disburse loans or invest in working capital for a period of one year. If the business transaction is satisfactory, it can be renewed. However, through renewal, any customer will get this facility for a maximum of three years.

At present, there are 120 shipyards in the country. In which, shipbuilding and repair work is being done. The shipyards now employ about 30,000 people. In the next five years, it will increase to more than one lakh. Considering the potential of this sector, a new refinancing scheme has now been formulated.