H1 industrial credit flow up by 12.26pc

Overall industrial credit disbursement rose by 12.26 per cent in the first-half (H1) of the current fiscal year despite political uncertainty and inadequate supply of gas and power.

The industrial loans disbursed rose to Tk 803.56 billion in the first six months of the fiscal year 2013-14 (FY 14) from Tk 715.83 billion in the corresponding period of the previous fiscal year, according to the central bank statistics.

The estimate includes disbursement of fresh credit, rescheduling of term loans and fund release for balancing, modernisation, rehabilitation and expansion (BMRE) of industrial units.

"We expect that the rising trend of industrial loan disbursement will continue in the coming months as the political situation has started stabilising in the country after the parliamentary elections held on January 5 last," said Masum Patwary, general manager of the SME and Special Programmes Department of the Bangladesh Bank (BB) while talking to the FE Sunday.

He also said the central bank had already advised the banks and non-banking financial institutions (NBFIs) to expedite their credit flow to productive sectors for achieving maximum economic growth by the end of the current fiscal year.

However, the disbursement of industrial term loans decreased by 1.77 per cent to Tk 215.65 billion during the period under review from Tk 219.54 billion in the corresponding period of the previous fiscal year because of political turmoil.

On the other hand, disbursement of working capital for industries increased by 18.46 per cent to Tk 587.90 billion in the H1 of the FY '14 from Tk 496.29 billion in the first six months of the FY '13.

He also said the recovery of industrial loans increased by 29.95 per cent during the period under review, as the banks and NBFIs intensified their recovery drives in line with the central bank directives.

The industrial credit recovery rose to Tk 744.57 billion in the H1 of the FY '14 from Tk 572.98 billion in the corresponding period of the FY '13, the BB data showed.

"We've asked the banks and NBFIs to boost their recovery drives for improving their financial health," the central banker noted.

Talking to the FE, a senior official of a leading private commercial bank (PCB), said the power, telecommunications, pharmaceuticals, textile and transportation sectors had received the lion's share of the credit.

He also said the flow of industrial loans would increase in the coming months if the government ensures better supply of gas and electricity to the industrial units.