Private companies allowed to get more foreign loans

Private companies will be able to get access to more foreign loans -- amounting to an aggregate sum of US$71.75 million -- from overseas sources shortly to help expand their business activities, officials said.
Twelve cases for their obtaining loans were approved at a meeting of the Foreign Loan and Supplier's Credit Scrutiny Committee held in the central bank on Monday with Bangladesh Bank (BB) Governor Atiur Rahman in the chair.
Of the approved loans, M/s Butterfly Marketing Limited will receive $15 million from the International Finance Corporation (IFC), a member of the World Bank Group, to establish air condition and refrigerator plant in Gazipur.
Besides, the committee approved 11 other cases of external loans -- $12.5 million for KSRM Billet Industries Limited, $2.50 million for Dada (Dhaka) Limited, $3.50 million for Blue Ocean Footwear, $2.75 million for R&R Aviation, $5.0 million for Sylvan Agriculture Limited, $6.93 million for Eco Couture Limited, $7.07 million for Eco Fab Limited, 4.77 million for M/S Israq Textile, $9.48 million for MI Cement Factory Limited, $1.56 million for Alim Knit (BD) Limited and $0.67 million for Mark Sweater Limited.
"We expect that all the funds will be received from the overseas sources within the next three months," a BB senior official, who is now working at the foreign loan security desk in the Board of Investment (BoI), told the FE after the meeting.
Overseas borrowing of corporate entities has increasingly become popular because of lower rates of interest and easier processing, the central banker explained.
He also said the average highest interest rate of the loans is six-month London Inter-bank Offered Rate (LIBOR) plus 4.50 per cent, which is no more than 5.00 per cent.
Currently, the local banks are providing loans to large and medium-scale industrial units at rates of interest ranging between 12.50 per cent and 18.00 per cent, and to small industries, at between 12.50 per cent and 23.75 per cent, according to the central bank statistics.
The flow of overseas loans, received by the private sector, increased by 81.93 per cent to $1.490 billion in 2012 from $819 million in the previous calendar year, the BB data showed.  
"A good number of proposals are now waiting for the committee's approval," another BB official said, adding that a six-member high-powered committee is now working in this connection.