Trading to get more loans from Tk20,000cr stimulus

Trading sector will now get more loans from banks and non-bank financial institutions than it used to enjoy before, a move that will help the country recover from the fallout of the coronavirus pandemic, according to Bangladesh Bank (BB).

In a circular issued on Thursday, the BB said traders are allowed to take 35% of stimulus package worth Tk20,000 crore for the cottage, micro, small and medium enterprises (CMSMEs).

“Trading is getting more loans from the package than other sectors. We also believe if they get more, it will help the economy recover from the pandemic,” said a senior BB official.

Earlier, the limit was at 30%. But before the pandemic, banks and non-bank financial institutions (NBFIs) could give maximum 20% of their loans to trading.

According to the central bank, as the lenders tend to extend more loans to trading sector, the latest move would expedite loan disbursement from the CMSME package.

As per the new circular, manufacturing and service sub-sectors will get no less than 65% of banks and NBFIs’ total loans to the economy and trading will receive maximum 35%.

The central bank has changed the CMSME loan disbursement rules four times since April this year.

Trade loans are facilities that are used by importers, exporters and domestic traders. It is short term in nature and helps firms settle trade transactions smoothly.