Despite low bank loan rates, private sector entrepreneurs are apparently not interested in utilising the opportunity. In the last couple of years, the rate of loans has fallen steadily.
From September to October this year, loans advanced to the private sector have fallen by 0.62 percent. In October, the bank loan rate was 10.04 per cent, which is the lowest in the last ten years.
Economists say that the loan sector is in a moribund state which has had an adverse impact on production and employment.
Loan growth in October was 10.04 per cent as against 10.66 per cent in September.
Executive director of Policy Research Institute, PRI, Dr Ahsan Monsur, said: “In future, loan growth may fall further in the private sector because the government will take more loans.”
Stating that the overall economy is passing through turbulent times, Dr Monsur added: “Businessmen are not getting conducive environment in this country. Many withdrew money from banks and took it abroad. As a result, a cash crisis has occurred in banks.”
The government has also taken huge loans from banks and default loan has risen along with interest rates. Consequently, loan growth has slipped.
As per Bangladesh Bank, growth did not hit such a level during the BNP-Jamaat’s subversion in 2013 and 2014. In 2010, loan growth was 10.80 per cent.
In 2012, it was 12.03 percent.
Dr Ahsan Monsur feels that loans rose due to the fall of NBR’s tax revenue.
“The falling rate of tax revenue may compel the government to take more loans; the private sector may become more constricted.”