Fresh BB fund for export-oriented industries

Bangladesh Bank (BB) has set up a fund of Tk 1,000 crore for the technology-based development of export-oriented industries and now entrepreneurs will be able to take loans from this fund at only 5 to 6 percent interest rate.

This loan will be granted for the development of technology of export-oriented industries that are congenial to the environment, said a source of Bangladesh Bank.

As per the decision of the central bank, banks and financial institutions will borrow from the fund at an interest rate of 3 percent and then give loan to the eligible owners of export-oriented industrial units for a period of five years at maximum five percent interest.

The interest rate on five to eight- year- term-loans will be a maximum of 2.5 percent and on eight to 10 -year loans the maximum rate will be three percent.

As a result, the interest rate on loans at the consumer level will be between 5-6 percent, said the  BB.

The 'Sustainable Finance Department' of the BB has recently declared the formation of this fund to make the country's export-oriented industrial units more competitive in the changing global situation.  

Banks and financial institutions which are interested in borrowing from this fund must first enter into an agreement with the central bank. But banks and financial institutions having default loans of more than 10 percent against the total disbursed loan will not be able to borrow from the fund.

"BB has set up the fund for technological advancement of export-oriented industrial units so that the industrial sector's overall productivity and competitiveness go up in a sustainable manner," said BB's Chief Spokesperson Md. Serajul Islam. 

The fund will have the refinancing and revolving attributes, he added.

According to the central bank, the loan will be disbursed to 11 more sectors but the highest priority will be given to export-oriented sectors as per the government's export policy.

The sectors are:  the main products of the respective industries or industry, energy efficient or renewable energy; business processing re-engineering / business process auto-related, operations management, waste management, air management, temperature management, work environment (fire management, health-care) management, water use or utilization management, human resource development and management related modern technology, accounting and inventory management, automation of marketing, sales and security management process.

BB's Sustainable Finance Department General Manager (GM) khandaker Morshed Millat said that technological development of the industries is very important for boosting productivity in a sustainable way. This fund will also help industrial sector to be more competitive globally.     

He also said that no loan will be given to projects that are not congenial to the environment.