The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) urged the government to reinstate the moratorium on loan instalments till June this year as the country's trade and commerce look set to take another hit from the pandemic.
The apex trade body said around 50 percent of businesses will turn defaulters without the moratorm
The businesses made the demand at a discussion meeting of the Council of Chamber Presidents-2022 organized by the FBCCI on Saturday in the capital. Presidents and vice-presidents of districts, cities and chambers of women entrepreneurs from all over the country addressed the meeting.
FBCCI President Md. Jashim Uddin was present as the chief guest at the meeting.
Under the moratorium, bank clients would not be recorded as defaulters even if they failed to pay any instalments in 2020. In 2021, borrowers to remain out of default needed to pay just 25 percent of their scheduled instalments. The facility was first introduced in mid-2020 amid the Covid-19 pandemic and extended several times to allow people falling into hard times to cope. It expired last on December 31,2021, before the latest wave of infections hit.
Expressing solidarity with the demands of the businessmen, the FBCCI president said "at least 50 percent of the borrowers" would default if the term of the loan classification facility was not extended.
"Bangladesh Bank's policy support is now needed even more overcome the pandemic recession. Otherwise, it will be difficult for business, trade and the economy to recover," Jashim said. He complained that the sectors whose business activities were shut down under the instruction of the government to control the Covid-19 infection have not yet received stimulus loans.
Though small and medium entrepreneurs have been most affected by the pandemic, they had received a very small amount as incentive so far, he said. Meanwhile a large portion of SME incentives were not distributed while incentive funds to the large industries were almost 100 percent discounted.
"Banks are reluctant to provide small loans to small and medium enterprises, as banks think it is not profitable to provide small loans. They think lending to the big business sector reduces the operation cost of the bank. But this idea is wrong. Rather it increases the risk of bad debt,” FBCCI president said.
Jashim called upon the government to keep private sector representatives in the policy-making meeting to create a business-friendly environment in the country.
He said the private sector contributes 82 percent to the economy, so a representative of the private sector is important for any policy formulation for the sake of business friendly policy.
The meeting was chaired by Mostofa Azad Chowdhury Babu, President of the Council of Chamber Presidents and Senior Vice President of the FBCCI. He said businessmen are still being harassed in the country for collecting taxes and VAT. Company law, import and export law are being renewed. The FBCCI is working to make these laws business friendly.
Presidents and vice-presidents of various chambers from across the country demanded that the FBCCI president be accorded the rank and status of a state minister.