Cinema owners to get soft loan

Cinema hall owners will soon get soft loan from the newly-formed Tk 1,000 crore refinancing fund of Bangladesh Bank for renovation and modernisation of cinema halls across the country to attract audiences.

Bangladesh Bank (BB) is likely to start disbursing loans soon from the newly formed Tk 1,000 crore refinancing fund to help salvage the country's ailing movie theatres, according to central bank.

"The central bank has formed revolving fund to safe the film industry as the number of operational cinemas came down below 100 due to a massive fall in the number of audiences across the country," said BB's chief spokesperson Serajul Islam.

The central bank said that there were around 1,400 movie theatres in the country during the 90s but the number has been declining over the years due mainly to a fall in the number of audiences.

''We've taken this step to give a boost to the country's film industry so that people can enjoy quality entertainment,'' said the executive director of BB Serajul Islam.

According to the central bank, the owners of existing cinema halls and new entrepreneurs will get finance from refinance scheme to renovate and modernise their complexes to attract audiences.

Under the refinance scheme, commercial banks will take out funds at 1.5 per cent interest while the borrowers of metropolitan areas will get it at 5 per cent interest. Borrowers outside metropolitan areas can avail the fund at 4.5 per cent interest, according to BB.

Borrowers will get payback tenure of eight years, including a one-year grace period.

BB formed the refinancing scheme with its own money and it will disburse Tk 500 crore in the first phase.

The rest amount of Tk 500 crore will be given based on the proper utilisation of the disbursed fund in the first phase.

BB also informed that an owner of a cinema will be able to borrow maximum Tk 5 crore from the scheme through a commercial bank and the borrower will not be able to use the money in the form of working capital to operate the halls.

"Borrowers must use the loan only for renovate and modernise of their complexes," BB said, adding that banks will take collateral and set a debt-equity ratio based on the bank-customer relationship.

"It is really a good initiative . . . hall owners will now be able to modernise their halls to attract audiences," said vice president of Bangladesh Film Exhibitors Association (BFEA) Mian Alauddin.

According to the BFEA, currently, there are 300 movie theatres in the country. Of them, 60-70 are currently operational.

Like other sectors, Covid-19 has also affected the country's film industry. Since the outbreak of coronavirus in March, 2020, the government has announced 23 packages, of which the banking sector has been implementing nine packages.

On October 4, 2020, information and broadcasting minister Hasan Mahmud informed that the government decided to set up a loan fund of Tk 1,000 crore for the development of the film industry as per an instruction from Prime Minister Sheikh Hasina to provide long-term loans with low interest rate to facilitate the reopening, renovation of old cinemas and the construction of new ones.

In 2020, the industry produced the least number of films and incurred a loss of about Tk 1,000 crore as the cinemas had been closed for six months since March, 2020.