ADB financing may take 6-8 months more; the regional agency is appointing consultants to local lenders
Due to lack of funds, banks have not been able yet to begin the implementation of the Tk2,000-crore loan package announced by the Prime Minister to create employment for unemployed and returnee migrant workers.
To implement the package, the government sought loans from the Asian Development Bank (ADB), which agreed to the proposal.
However, the ADB now says it needs at least 6-8 months to complete the process and disburse the loan. The regional lender is now appointing consultants to three specialised banks and a financial institution.
Bankers fear that the entire process will take a long time, delaying the process of the implementation of the employment generation package.
Prime Minister Sheikh Hasina earlier announced Tk2,000 crore in loans to unemployed and returnee migrants through Karmasangsthan Bank, Probashi Kallyan Bank, Palli Sanchay Bank and Palli Karma-Sahayak Foundation, with Tk500 crore from each.
The budget for 2020-21 has granted allocations for the sector.
The finance division had planned to start the loan distribution by giving at least Tk250 crore to each organisation. In line with the plan, it issued a letter to the relevant institutions to begin loan disbursement quickly but could not release the money owing to the government's lower revenue income.
According to people concerned, a virtual meeting was held among the Financial Institutions Division, the ADB and the chief executives of the banks on July 5.
At the meeting, the ADB asked for a concept paper on how the banks would spend the promised money.
When asked, Akbar Hossain, managing director of Palli Sanchay Bank, told The Business Standard that the finance ministry did not give it the pledged Tk250 crore from the budget to implement the package.
"Now, the government will fund the loan from the ADB. However, the ADB told us it would take at least 6-8 months more to complete the overall process and get funding.
"Employment creation for the jobless poor should begin right now, but I do not understand to what extent the loans will come to their use if we get the [ADB] funds after six more months."
Akbar Hossain said the ADB had already appointed a consultant in his bank, who will review the bank's overall data and report to the ADB after three months.
"Based on that, the ADB will decide whether to finance. There will be a lot of meetings and time will be spent on how we want it [funds] and how they want to lend it."
Mahtab Jabin, managing director of Probashi Kallyan Bank, feared that the ADB financing might take even more time though it said it would do it within 6-8 months.
He told The Business Standard that a consultant would also be appointed at his bank, but he had not received the letter yet.
Probashi Kallyan Bank is ready to lend money from its own funds to the workers who have returned to the country after losing their jobs amid Covid-19, he said.
However, they should be imparted training because they have done different kinds of work under different employers abroad. Now, they will be small entrepreneurs with loans. So they need appropriate training before taking out loans.
Govinda Bar, the ADB's public relations officer at its Dhaka office, said the ADB head office was in direct discussions with the Financial Institutions Division and the Dhaka office did not know the details about the funding.