BLFCA to work on liquidity crisis to sustain economy

BP Business Desk 

Leaders of non-banks or non-bank financial institutions (NBFIs) on Tuesday at a press conference said they would come forward to revive the country's economy in the face of ongoing COVID-19 crisis by working on liquidity crisis, enhancing internal economic capacity and supporting bond market.

They made the remarks at the first online press conference with the newly appointed committee members of Bangladesh Leasing and Finance Companies Association (BLFCA).

Highlighting the performance, contribution and challenges of the financial institutions, BLFCA Chairman Mominul Islam, also managing director (MD) and CEO of IPDC Finance Limited, said, “NBFIs have been contributing to the socio-economic development of the country for past few decades. 

Currently 33 financial institutions with their 276 branches and 8,358 officers are serving 255,000 customers across the country. As of December 2019, our outstanding loan is over 67,000 crores, the lion share of which goes to industrial term loan, SME finance and housing finance helping more than 100,000 job creation every year.”

“The capital adequacy ratio of the FI sector is healthy at 16.9 percent while the the same for banking sector is 11.6 percent while return on asset in NBFI scetor is more than double vis-à-vis banking sector (1.0 percent vs. 0.4 percent). The Classified Loan Ratio in FI sector is also at par with banking sector. 

However due to two three FIs the image of the sector has got somewhat tarnished,” he added. He expressed his optimism that by solving the ongoing liquidity crunch in the sector with the help of Government and Bangladesh Bank, FIs will come forward to extend hand for the restoration and ressuraction of businesses of their affected clients.

While discussing the next two years plan, Golam Sarwar Bhuiyan, vice chairman of BLFCA and MD of IIDFC, said, “To take the NBFIs forward, we have organised various workshops for developing the skills of employees at the sector. Besides, we are in talks with banks and government to reduce the existing distance between us, to enhance the ICT-based development and the bond market.”

BLFCA Vice Chairman Abu Zafar Md Saleh, also MD and CEO of Islamic Finance and Investment Limited, said, “For the development of the country, it is necessary to allocate works and enact separate regulations for each sector. If every sector runs the same, the economic development will be severely hampered. Besides, the country's non-bank or non-bank financial institutions are moving ahead in every area.”

SM Shamsul Arefin, BLFCA executive member and also MD and CEO of Uttara Finance and Investments Ltd, said, “We don’t want to compete with the banks rather want to work together. Our services are easier to receive than in the banks. Hence, customers can get easy loan facility without getting upset.”