Industrial credit flow rises 30pc in FY ‘15

Industrial credit disbursement recorded a significant rise by more than 30 per cent in the last fiscal year (FY), 2014-15, despite political turmoil and inadequate supply of gas and power, officials and bankers said.
The disbursement of industrial credit, including the term loan, rose to Tk 2,193.30 billion in the FY 15, from Tk 1,684.14 billion in the previous fiscal year, according to the central bank latest statistics.
The estimate includes disbursement of fresh credit, rescheduling of industrial credit along with short-term loan, and fund release for balancing, modernisation, rehabilitation and expansion (BMRE) of industrial units.
"We expect the rising trend in disbursement of industrial loans will continue in this fiscal year also, as the central bank is encouraging the banks and non-banking financial institutions (NBFIs) to expedite their credit flow to the productive sectors," a senior official of the Bangladesh Bank (BB) told the FE on Sunday.
Large- and small-scale industries have contributed to increasing the flow of credit to industrial sectors in FY 15, the BB official explained.
The central banker also said the disbursement of industrial credit was seriously hampered in the third quarter (January-March) of the last fiscal year because of confrontational political situation during the period.
"We're working continuously to develop the SME sector across the country through providing refinancing facility to the banks and NBFIs," he noted.
Senior bankers, however, said the power, telecommunications, pharmaceuticals, textile and transport sectors received the lion's share of the credit.
Besides, some short-term import financing were converted into industrial credit to avoid classification of the loan portfolios, a senior official of a leading private commercial bank (PCB) said while explaining the rising trend of industrial loan.
He also said: "The flow of industrial loan will increase in the coming months, if the government ensures better supply of gas and electricity to the industrial units."
On the other hand, the recovery of industrial credit increased by only 9.22 per cent in the last fiscal despite close monitoring by the central bank.
In FY 15, the industrial credit recovery was Tk 1,693.95 billion, compared to Tk 1,550.98 billion in the previous fiscal, the BB's data showed.
Classified loan in industrial sector increased by 24.14 per cent in FY 15 to Tk 189.01 billion, from Tk 152.26 billion in the previous fiscal due to lower recovery, the BB official added.
    siddique.islam@gmail.com