B Mirror Report: Bangladesh Bank is preparing to launch a Tk 40,000 crore refinance scheme aimed at reopening closed factories, safeguarding employment, and supporting the export sector amid ongoing economic challenges.
According to officials familiar with the development, the central bank has drafted a policy proposal that is expected to be sent to the Prime Minister for approval this week. Once approved, an official circular will be issued to implement the scheme.
The proposed package allocates Tk 20,000 crore for large industries, Tk 10,000 crore for cottage, micro, small and medium enterprises (CMSMEs), and Tk 10,000 crore for the agricultural sector.
The short-term financing will be provided as working capital loans with tenures ranging from one to one-and-a-half years. The funds will enable factory owners to restart production and bring idle machinery back into operation.
A senior Bangladesh Bank official, speaking on condition of anonymity, said the facility will primarily target businesses that were previously operational but have struggled due to post-pandemic challenges, the Russia-Ukraine war, and foreign exchange market volatility. Firms with confirmed orders and strong market demand will be given priority.
Discussions are ongoing on whether the fund will be financed by the central bank or the government, with central bank funding seen as more likely despite inflation concerns from increased money supply.
Banks are expected to access the fund at interest rates of around 5–6 percent, while lending rates for borrowers may be set slightly above the inflation rate but below the policy rate.
Bangladesh Bank has already collected data from banks and business groups, identifying more than 1,200 closed or partially operational industrial units. These have been categorized based on outstanding loan amounts, with separate lists for loans above and below Tk 100 crore.
Factories with viable market prospects will be prioritized under the scheme. Those classified as defaulters may be allowed to reschedule their loans under relaxed conditions before receiving financial support.
Bangladesh Bank spokesperson Arif Hossain Khan said discussions with the government are ongoing and that the fund and its guidelines will be finalized after approval.
Economists have welcomed the initiative but cautioned about potential macroeconomic risks. They emphasized the need to support only viable businesses and ensure a sustainable funding source.
Concerns have also been raised about inflation, as increased liquidity from central bank financing could push up prices. Officials noted that stricter monitoring will be in place to prevent misuse of funds, and companies involved in financial irregularities or money laundering will be excluded from the scheme.
