Private sector credit growth increased slightly in September, following a rising trend in trade financing, bankers said.
Purchasing raw hide of sacrificial animals during the Eid-ul-Azha festival has also contributed to raise the private sector credit growth during the period under review, they added.
The private sector credit growth rose to 12.15 per cent in September 2014 on a year-on-year basis from 11.39 per cent in August. It was 11.25 per cent in July.
"The rising trend of private sector credit growth may continue in the coming months also, if the prevailing political stability continues," a senior official of a leading state-owned commercial bank (SoCB) told the FE Thursday.
He also said the credit demand may rise in the near future, as most of the banks have already reduced their interest rates on lending.
"The overall credit demand has increased amid gradual acceleration of the country's overall economic activities after a prolonged political gridlock last year," the SoCB official explained.
The trade financing increased substantially in the first quarter (Q1) of the current fiscal year (FY), 2014-15, mainly due to higher import of fuel oils and capital machinery, according to the bankers.
The actual import in terms of settlement of letters of credit (LCs) increased by 10.92 per cent to US$9.80 billion during the July-September of the FY 15, from $8.83 billion in the corresponding period of the previous fiscal.
"The credit demand normally increases ahead of the Eid-ul-Azha festival for purchasing raw hide," a senior official of a leading private commercial bank (PCB) said.
Four SoCBs have disbursed around Tk 5.22 billion as loans among tanners to help them procure raw hide of sacrificial animals during this Eid-ul-Azha. "However, the investment situation is yet to reach a satisfactory level even after over 10 months of the January 5 national elections," the banker observed.
Total outstanding loan stood at Tk 5,223.99 billion as of September 2014 against Tk 4,657.89 billion in the corresponding period of the previous year, according to the Bangladesh Bank (BB) statistics.
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