Economists attribute many businesses not getting loans to poor management on the part of the government and non-cooperation from banks
The finance ministry has claimed to have completed 55% of disbursements from over Tk1.2 lakh crore worth of stimulus packages offered to help businesses bounce back from pandemic shocks.
However, experts allege that such bailout packages have hardly had any positive impact to offset the damages that small ventures, marginalised people in particular, suffered during the countrywide shutdown.
Moreover, a large number of entrepreneurs from manufacturing and service sectors have not received any benefit from the stimulus packages yet, said industry insiders.
Economists attribute many businesses not getting loans to poor management on the part of the government coupled with non-cooperation from banks.
They were addressing the first session of a dialogue titled "Stimulus Package for sustainable and inclusive recovery from Covid-19 fallout in Bangladesh". The theme of the first session was "Job retention, restoration of demand and maintain the supply chain".
While presenting the keynote paper, Finance Division Senior Secretary Abdur Rouf Talukder said Bangladesh's economy has made a turnaround from the Covid fallout. Businesses are now going on smoothly. The implementation of stimulus loans has so far reached 55%."
But he acknowledged slow progress in disbursements for small and medium enterprises (SMEs) and the agriculture sector.
As of October, only Tk6,500 crore from the Tk20,000 crore package allocated for the SME sector has been disbursed, according to data from the Bangladesh Bank. On the other hand, importers have borrowed Tk8,000 crore from the Tk33,000 crore package for large industries at 2% interest rate.
Besides, only Tk276 crore in agriculture loan from the Tk3,000 crore re-financing scheme and Tk497 crore from the prime minister-announced special scheme for agriculture amounting to Tk5,000 crore were distributed.
Dr Naznin Ahmed, senior fellow at the Bangladesh Institute of Development Studies (BIDS), said the SME sector, especially women entrepreneurs, got very little from stimulus support.
"I have talked to at least 150 women entrepreneurs. They told me that they did not get any benefit from stimulus loans," Dr Naznin said.
However, she mentioned some successes in lending through non-government organisations, Karmasangsthan Bank and Palli Karma-Sahayak Foundation from stimulus packages.
"The government allocated Tk5,000 crore to Palli Sanchay Bank under the stimulus package. So far, Tk2,500 crore has been disbursed. This money went to around 44,000 marginalised people. The loan size is around Tk48,000 per beneficiary. They are utilising the money for different income-generating activities, including cattle rearing, fishing, poultry and tree plantation. This is not a large amount of money but still helping them," she added.
Dr Selim Raihan, executive director at South Asian Network on Economic Modelling (Sanem) said most businesses except for the big ones are yet to get stimulus loans.
Citing a survey report of Sanem, he said in September, 72% of businesses did not receive any money from the government-announced stimulus packages, while 9% of company proprietors did not know enough about the packages."
Of the 301 small firms covered in the survey, 8% received incentives. Of 44 medium-sized firms, 20% received the funds.
Some 156 large firms took part in the survey, of which 41% had received the stimulus funds. However, according to the report's findings, it is now easier for firms to get access to the funds compared to the previous quarter.
Dr Selim Raihan said because of a complicated process, non-compliance with all bank conditions, and a lack of information about incentives, small companies were not getting the funds.
Prime Minister's Principal Secretary Dr Ahmad Kaikaus admitted that loans under the government's stimulus packages are not reaching beneficiaries properly.
"Our stimulus packages have played an important role in the country's economic recovery from the pandemic compared to those of other countries. It is not possible to get 100% success in our country. There are some problems in [disbursements]. We are trying to solve those."
Ahmad Kaikaus said the country's economy is bouncing back quickly from Covid-19 related impacts, backed by different timely policy supports of the government under the dynamic leadership of Prime Minister Sheikh Hasina.
Immediately after the pandemic hit in March, the government rolled out a raft of measures to help boost the economy and with the government's policy support, Bangladesh is returning quickly to the previous position, he added.
Dr Rubana Huq, president of Bangladesh Garment Manufacturers and Exporters Association (bgmea), pointed out some issues that the export sector is now going through even though it benefited the most from the stimulus packages.
"Exports are now witnessing a slump in most European countries, which might fall further because of the Covid-19 second wave. The reason for worry is a drop in prices of apparel items with no new orders," Rubana also said.
The average apparel price drop might go up to 5.25% in the current fiscal year from 1.8% last year, she added.
Rubana Huq said if the readymade garment sector continues to receive orders up to June 2021, the sector can survive and go forward without requiring any incentive.
She sought a little bit of help during the time for mitigating the impacts of Covid-19.
During the pandemic, the apparel sector has managed to survive on the back of the stimulus package, said Commerce Minister Tipu Munshi.
"If we continue our business activities, our people can get money, and the wheel of our overall economy will remain in motion," he said.
"Ministries and organisations have strengthened their coordinated efforts to mitigate the impact of Covid-19. The second wave has started. We will have to provide more coordinated efforts to tackle its impact," Tipu Munshi also said.