Entrepreneurs from the private sector are not getting required loans from banks. Bank officials say that due to cash crunch and soaring government debt, loans cannot be distributed. The current loan growth is the lowest of the last six years. A central bank report says: after June, 2013, this is the lowest loan growth.
In 2013, the country was passing through political turmoil. Due to lack of loans, many are failing to expand businesses and, therefore, employment is also not rising.
Young entrepreneur Kazi Sajidur Rahman, says: “We need loans to expand business but banks are saying they do not have enough cash; I asked for Tk 200 million but not getting even Tk. 50 million.”
Bangladesh Bank report says that in July, loan growth fell to 11.26 per cent.
Former chairman of Association of Bankers, Bangladesh, Anis A Khan, says: “Due to high interest rate, loan growth has shrunk because people are unwilling to take loan at such high interest.”
However, he feels that cash crunch of the banks and rise of government loans are main reasons for fall in loan growth.
Central bank report states that even in mid-2017, loans rose in the private sector. To control loan flow, Bangladesh Bank reduced ADR and following this move, the loan growth began to fall.
During the current fiscal year, under the new currency policy, the target for loan growth in the private sector has been set at 14.8 per cent, with target will December, 2019 set at 13.2 per cent.