BM Desk : Foreign-owned or managed businesses in Bangladesh’s manufacturing and service industries may now find it simpler to obtain long-term loans in local currency. Bangladesh Bank issued a circular in this regard on Wednesday.
According to the circular, foreign-owned or controlled businesses that have been doing business in Bangladesh for three years or longer will be eligible to borrow money from local banks or financial organizations. However, this requires sufficient adherence to current lending policies and financial data. like the debt-to-equity ratio and the single borrower cap. In the past, these companies’ debt-to-equity ratio was fixed at 50:50. In other words, if an entrepreneur contributed 50% of the money, he may receive 50% of the loan.

As per the recent decision, the ratio has been adjusted to 60:40. Entrepreneurs can now access 60 percent of the loan by contributing 40 percent of their own capital. The bank has made this determination.

In other terms, the Bangladesh Circular further clarifies that all other conditions will remain unchanged. Stakeholders believe this decision will promote foreign investment.

Bangladesh Bank indicates that to assist foreign-owned or controlled companies in securing loans from local sources, the debt-equity ratio has been eased. This adjustment allows foreign firms investing in Bangladesh to obtain substantial amounts of funding from local banks or financial institutions with greater ease. Through this initiative, Bangladesh Bank aims to achieve two objectives. First, to foster a more favorable financial climate for foreign investors, encouraging them to increase their investments. Second, to expedite the growth or modernization of foreign enterprises within the domestic production and service sectors, making the process quicker and more efficient.