Loan repayment hits hard Jashore traders grappling with low sales
Traders at a loss due to constant bank pressure for loan repayment
Jashore businesses are now facing a double whammy of poor footfall and pressure from banks to repay stimulus loans they had taken out to offset pandemic-induced losses.
Factories are open, but there is hardly any work order. Besides, the number of buyers at motor parts and clothing shops has declined sharply compared to what was experienced in pre-Covid times, say traders and entrepreneurs.
Jashore, a hotspot for automotive and motorbike parts, sees at least Tk3,000 crore transactions every year in pre-pandemic times. There are 140 motor parts shops in the town.
But all are yet to get back normalcy in their businesses as the people with pandemic-caused income erosion are refraining from buying such products until it is necessary, said Jakir Hossain, owner of a motor parts shop named Bikrampur Hardware.
"Our daily sales have dropped drastically to only Tk10,000 from Tk2 lakh in pre-Covid times," he noted.
Akhter Hossain, owner of Enayet Engineering Factory - an automotive parts manufacturer based in the Bangladesh Small and Cottage Industries Corporation (BSCIC), said they have to cut down on production of parts significantly owing to a lack of work orders. The factory used to receive orders worth around Tk50 lakh worth of orders a month before the pandemic hit.
"We cannot even pay workers and electricity bills with our earnings nowadays," he said.
Ayaz Uddin Ripon, owner of Ripon Autos on RN Road in the city, said there has been no momentum in the business for the last two years. Costs are rising, but incomes are falling abnormally. Again, they are now to pay loan instalments as the grace period has ended.
Their daily transactions plummeted to 2% from 10%, he added.
While talking to The Business Standard, Sheikh Mostafa Ali, general secretary of Jashore BSCIC Industrial City Owners' Association, said shop owners now are at a loss over how to keep their businesses up and running, said
On top of it, traders are having to repay loan instalments by borrowing from others as the grace period has ended, he noted.
Shyamal Das, managing director of MUCEA Foods at Bscic industrial city, told TBS, "It would have been easier for us to overcome this lean period had we got more time to repay government stimulus loans we got."
It will take at least one more year for businesses to recover the pandemic losses, he said.
There are 115 out of 118 economic units at the BSCIC industrial city, covering 50 acres of land just beside the district town, BSCIC officials said.
Shahinur Hossain Thandu, president of Jashore Motor Parts Business Association, said owners of motor parts shops are worried over repayment of bank loans. Everyone will benefit if the stimulus loan repayment period is extended by one more year.
Mizanur Rahman Khan, former president at Jashore Chamber of Commerce and Industry, said the district's economy has collapsed due to the pandemic. Although the government exempted the interest on bank loans during the pandemic, the banks are not abiding by the instruction. They are now realising that money.
The traders are paying bank instalments by borrowing money, he also said.
"It may take at least two more years for the district's economy to recover. For this, the government has to cooperate more," Mizanur added.
