BB launches $300m investment fund

The central bank launched a US$300 million investment fund for helping the country attain maximum economic growth through accelerated productive activity.    
Officials said with this end in view, the funds would be used for boosting medium-and long-term investment, particularly in productive sectors.
The Bangladesh Bank (BB) issued a circular along with 112-page operations manual Tuesday to disburse the funds under the Financial Sector Support Project (FSSP) of the central bank.
The money will be mobilised with help of the World Bank to facilitate manufacturers on long-term basis, according to the BB officials.
Meantime, the central bank has signed  a  project  agreement (PA)  with  the  International  Development  Association (IDA), a member of the World Bank Group, which offers concessional loans and grants to the world's poorest developing countries to carry out the  tasks  for implementation of projects.
"The objective of the project is to improve financial market infrastructure of the country, regulatory and oversight capacity of Bangladesh Bank and access to long-term financing mainly for manufacturing firms in Bangladesh," the BB said in its circular.
Under  the arrangement,  the central bank will provide long-  term  financing  in  foreign  currency  mainly  for small- and medium- scale  manufacturing  enterprises in  the  country, they explained.
The funds will be provided to eligible participating financial institutions (PFIs) for lending/refinancing to the eligible firms, according to the circular.
It said interested banks may apply to the project director (PD) of FSSP for participating in the financing facility.
Maturity of the loans will be from three to 10 years under the project.
The interested entrepreneurs may avail such loan by paying interest at rates between 6.0 per cent and 7.0 per cent, the BB officials explained.
Talking to the FE, a BB senior official said the central bank has taken the latest moves to increase investment, particularly in productive sectors, for achieving maximum economic growth by the end of this fiscal year (FY), 2015-16.
Currently, the central bank is providing a short-term foreign currency facility under the Export Development Fund (EDF) involving US$2.0 billion for the country's exporters.
Besides, he added, the central bank is also working to launch another fund worth $200 million with its own resources to facilitate green financing in different productive sectors, including textiles and leather.
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