Private sector credit flow up again in Oct

FE Team | Published: December 21, 2009 00:00:00 | Updated: February 01, 2018 00:00:00

Siddique Islam
Private sector credit flow again witnessed a rising trend in October after a month of declining growth, indicating that the country's overall business activities have started improving slowly.
Private sector credit growth rose to 15.40 per cent in October from 13.65 per cent in September, against lower growth recorded in about last two years, according to the central bank statistics.
"The credit flow to private sector increased during the period mainly due to the rise in financing small and medium enterprises (SME), agriculture and trade," a senior official of the Bangladesh Bank (BB) told the FE Sunday.
The BB officials and senior bankers expect that the upward trend of private sector credit might continue in the near future also due to recovery of major economies from the global meltdown and restoration of confidence of the country's business community.
They also said private credit would increase sharply, if the government could fast-track projects under the newly-launched Public Private Partnership (PPP) investment initiative.
The credit flow to private sector recorded a growth of 15.40 per cent to Tk 305.946 billion in October 2009 on a year-on-year basis compared to 24.82 per cent or Tk 395.149 billion of the previous year, the BB's data showed.
"The upward trend of private sector credit flow will continue and it should increase gradually," Agrani Bank Limited Managing Director and Chief Executive Officer Syed Abu Naser Bukhtear Ahmed told the FE.
He also said project financing is yet to be increased because new entrepreneurs are not interested to set up industrial plants due to shortage of gas and electricity.
"We need employment generations in the country through industrialisation," Bukhtear said, adding that credit flow to private sector would grow gradually as soon as better supply of gas and power in industrial units will be ensured.
Disbursement of agricultural credit during July-October 2009 stood at Tk 29.746 billion compared to Tk 25.076 billion in the same period of the previous year, the central bank said.
"Recovery of agriculture credit during July-October 2009 also stood higher at Tk 32.489 billion compared to Tk 16.97 billion during July-October 2008," the central bank said in its 'Major Economic Indicators: Monthly Update' of November 2009.