In the last three months – after the announcement of stimulus packages for farmers and small businesses – banks and non-bank financial institutions (NBFIs) could disburse less than 10 percent of Tk28,000 crore.
The central bank yesterday gave them two more months to disburse the rest of the low-cost loan intended to support low-income groups – hit-hardest by the pandemic-induced shutdown.
The 66-day shutdown ended on May 31, but only Tk2,795 crore reached the targeted people until July 31 since the three stimulus packages – Tk20,000 crore for small and medium enterprises (SMEs), Tk5,000 crore for agriculture, and Tk3,000 crore for microfinance – were announced.
Banks and non-bank financial institutions will now have to fulfil the disbursement target of these stimulus packages within October 31 this year.
Previously the central bank set a deadline of August to disburse loans from the Tk20,000 crore stimulus package.
The Bangladesh Bank Governor Fazle Kabir on yesterday instructed 15 banks and four non-bank financial institutions' top officials to gear up the disbursement process of the stimulus packages at an online meeting.
All the participant banks and non-bank financial institutions each have a disbursement target of below Tk300 crore under the Tk20,000 crore package meant for small businesses.
Disbursement of the Tk5,000 crore package for the agriculture sector and the Tk3,000 crore package for microfinance was also discussed at the meeting.
Fazle Kabir urged the banks and non-banking financial institutions to ensure faster implementation of the stimulus packages as the small entrepreneurs and low-income groups are facing a huge financial crisis now.
At the beginning of April this year, Prime Minister Sheikh Hasina declared a series of stimulus packages to cushion the effects of Covid-19. And the central bank issued a guideline to implement the packages.
The Bangladesh Bank also formed several refinance schemes to enable the banks to get low-cost funds. Of this Tk10,000 crore refinance scheme was set for small businesses, and Tk5,000 crore for agriculture and Tk3,000 crore for microfinance.
"The pace of loan disbursement, under the financial packages, in the last four months was not satisfactory, and Prime Minister Sheikh Hasina wants their execution to be expedited," Fazle Kabir told the managing directors of the banks and non-banking financial institutions.
The governor set a deadline for the banks and non-banking financial institutions to meet their disbursement targets within October 31 this year, Md Serajul Islam, spokesperson and executive director of the central bank, told The Business Standard.
According to the central bank data, banks disbursed around Tk2,070 crore loan under the stimulus package for small businesses in the last four months.
Under the package, banks are providing loans at 9 percent interest to the small businesses and the borrowers have to pay 4.5 percent interest for that. The government will pay the rest of the interest.
And banks disbursed around Tk459 crore loan under the Tk5,000 crore package for the agriculture sector during the last four months. The interest rate for the loan is 4 percent.
During the same time, Tk266 crore loan was disbursed under the stimulus package for low-income groups.
IPDC Finance Managing Director Mominul Islam said, "We, who joined the meeting, assured the governor that we will try our best to meet the targets within the deadline."
Serajul Islam said, "We will sit with the rest of the banks soon to implement the targets."