Trading sector gets 65pc of Tk 47,130cr loan
Sixty-five per cent of Tk 47,130-crore SME loan disbursed by scheduled banks and non-bank financial institutions in the first half of 2014 went to trading sector bypassing the manufacturing zone, according to BB data released on Tuesday. Experts said that the major financial goal of small and medium enterprises could not be fulfilled due to the higher loan disbursement trend in the trading sector than the manufacturing sector.
The higher loan disbursement in the trading sector usually puts a lower impact on the country’s overall economy as such trend fails to expand the industrial sector along with creating employment generation, they said.
The BB data, however, showed that overall SME loan disbursement had increased by 12.62 per cent in January-June of 2014 compared with that of a year-on-year rise in 29.74 per cent in the same period a year ago.
All banks and NBFIs had disbursed a total of Tk 47,130.38 crore in SME loans in the first six months of 2014 against Tk 41,848.56 crore during the same period of 2013.
The SME loan disbursement by banks and the NBFIs had increased by 9.85 per cent to Tk 30,506.17 crore in the trading sector in the first half of 2014 against Tk 27,769.46 crore in the same period of 2013.
The trading sector got 64.74 per cent of the total SME loan disbursement in the first half of 2014 while it got 66.35 per cent in January-June of 2013.
The higher loan disbursement trend indicates that the banks were more interested in the trading sector, a BB official told New Age on Tuesday.
The banks and the NBFIs disbursed Tk 12,959.26 crore and Tk 3,664.05 crore in loans in manufacturing and service sector respectively in the first six months of 2014 against Tk 11,869.35 crore and Tk 2,209.75 crore in same period of 2013.
The manufacturing sector got 27.49 per cent of the total SME loan disbursement in the first half of 2014 although the sector got 28.36 per cent during the same period of 2013.
The BB official said that the SME loan disbursement had increased significantly in the first half of 2014 but it created little impact on the country’s industrialisation process.
Bangladesh Institute of Development Studies research director Zaid Bakht told New Age that the central bank should impose embargo on disbursement of excessive loan to the trading sector as such type of credit failed to play role much in increasing employment generation.
‘The BB should prepare a specific guideline about the SME loan disbursement ratio between the manufacturing and the trading sector. The central bank should set a higher loan disbursement in the manufacturing sector than the trading zone’, he said.
The higher SME loan disbursement in the trading sector cannot add much value on the economy as it (trading sector) puts little impact on expanding the industrialisation, Bakht said.
The banks and the NBFIs usually give the higher SME loan in the trading sector as this type of credit is less risky than the loan given to the manufacturing sector, he said.
Former finance adviser to the caretaker government AB Mirza Azizul Islam told New Age that the central bank should give emphasise on increasing the loan disbursement in the manufacturing sector avoiding the trading sector.
The BB should also monitor the credit disbursement in the trading sector by the banks and the NBFIs whether the loan is being diverted to capital market or real-estate sector, he said.
The central bank should strengthen its monitoring system on the SME loan to avoid fund diversion to another sectors, Aziz said.
He, however, said the trading sector was not fully unproductive as it (trading) played some contribution to generate employment.
‘Besides, production is not possible without trading.’
-With New Age input
