Industrial credit disbursement rises by 30pc in Q1 of FY '09

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Siddique Islam
Industrial credit disbursement recorded a significant rise by over 30 per cent in the first quarter (Q1) of the current fiscal compared to the corresponding period of the last fiscal.
"The upward trend of the industrial term loan disbursement will continue in the next quarters to meet the growing demand of the businessmen and entrepreneurs," a senior official of the Bangladesh Bank (BB) told the FE Thursday.
The disbursement of industrial term loans stood at Tk 49.50 billion during the July-September of the fiscal 2008-09 (FY09). A total of Tk 37.84 billion was disbursed during the corresponding period of last fiscal, according to the central bank statistics.
This includes fresh credit, rescheduling of term loans and fund release for balancing, modernisation, rehabilitation and expansion (BMRE) of industrial units, the BB official said while explaining the reasons for the hefty growth of industrial credit flow.
"Import of capital machinery and industrial raw materials increased during the period against the corresponding period of the last fiscal following the higher disbursement of industrial term loans," the central bank official noted.
Industrial raw materials import increased by 40.36 per cent to $2.474 billion during Q1 of the FY09. The amount is up at least $711.58 million from that of the corresponding period of the last fiscal, the BB's data showed.
The BB said import of capital machinery -- industrial equipment used for production -- rose by 15.50 per cent to $423.74 million, reflecting a rising confidence among entrepreneurs in the country's future industrial prospects.
Commercial bank officials, however, expect the uptrend in disbursement of industrial term loans to continue in the near future in different sectors, including power and telecommunications.
"We see the increased demand for term loans, particularly in power sector, will continue in the near future to meet the growing demand for electricity across the country," a senior official of a private commercial bank (PCB) told the FE.
He also said the energy and power, telecommunications, pharmaceuticals and textile sectors have received the lion's share of such loans.
The major shares of loans were disbursed through syndications among the commercial banks and non-banking financial institutions during the period, the PCB official added.
The recovery of term loans increased by more than 47 per cent during the period under review as the banks and non-banking financial institutions (NBFIs) intensified their recovery drive in line with the central bank directives, the BB officials said.
During the period, the industrial credit recovery stood at Tk 38.78 billion compared to Tk 26.25 billion of the corresponding period of the previous fiscal, the data showed.