Disbursement of industrial term loans marks slight fall in FY’ 14

The disbursement of industrial term loans registered a slight downward trend in the last fiscal year over the previous fiscal because of political turmoil and inadequate supply of gas and power.
The disbursement of industrial term loans decreased by 0.51per cent to Tk 423.11 billion in the FY 2013-14 from Tk 425.28 billion a year ago while working capital for disbursement to industries increased by 22.23 per cent to Tk 1261.02 billion from Tk 1031.65 billion.
"The disbursement of industrial term loans hampered seriously in the first half of the FY 14 because of confrontational political situation prevailed in the first six months of the last fiscal," Masum Patwary, general manager of the SME and Special Programmes Department of the Bangladesh Bank (BB) explained.
He also said the industrial term credit disbursement witnessed a rising trend following improvement of the country's overall political situation after holding the parliament election on January 5 last.
"We expect that the rising trend of industrial term credit disbursement will continue in the coming months if the political stability continues," Mr. Patwary told the FE Thursday.
He also said the industrial term loan disbursement has already increased by more than 23 per cent in the last quarter of the FY 14.
The industrial term loans disbursement rose to Tk 114.62 billion in the April-June period of the FY 14 from Tk 92.83 billion of the previous quarters in the same fiscal. However, the overall industrial credit disbursement increased by 15.59 per cent to Tk 1684.14 billion in the FY 14 from Tk 1456.94 billion in the previous fiscal, 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.
The BB official also said the central bank is now working to increase the credit flow to the productive sectors including industrial ones through strengthening refinancing supports to the banks and non-banking financial institutions (NBFIs).
"We've already advised the banks and the NBFIs to expedite their credit flow to productive sectors for achieving maximum economic growth by the end of the current fiscal year," the central banker noted.
He also said the recovery of overall industrial loans increased by 27.08 per cent in the FY 14 as the banks and NBFIs intensified their recovery drives in line with the BB's directives.
The industrial credit recovery rose to Tk 1550.98 billion in the last fiscal year from Tk 1220.45 billion in the FY 13, the BB data showed.
The power, telecommunications, pharmaceuticals, textiles and transportation sectors had received the lion's share of the credit, according to a senior official of a leading private commercial bank (PCB).
"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," the private banker noted.