Bangladesh creates Tk 10bn fund to technologically advance export-focused industries

Bangladesh Bank has created a Tk 10 billion refinancing fund for technological advancement of the export-oriented industries.

The interest rate on loans from the fund will be five to six percent at the consumer level.

The banks and financial institutions will take loans from the fund at one percentage point less than the bank rate and disburse them after adding two to three percentage point in interests.

The terms of the loans from the fund will be between three and 10 years, according to a notice issued by the central bank on Sunday.

Bangladesh will need to increase per capita export earnings and the portion of exports in GDP, for which there is no alternative to modernisation and technological development of the export-oriented industries, the central bank said.

To increase the industries’ competitiveness and sustainability, Bangladesh will need to ensure environment-friendly production, save fuel, improve workplace environment, and modernise machineries and technologies, it added.

The entrepreneurs of special development-based sectors and those given top priority in the Export Policy 2018-23 will be eligible for loans from the fund.

Currently, the bank rate is four percent after a one percentage point cut last year amid the pandemic crisis.

It means that the banks and financial institutions will take loans from the fund at 3 percent interest and charge 5 percent interest for disbursement.

The interest rate will be 5.5 percent for loans with a term between five and eight years while the rate will be 6 percent for loans with terms between eight and 10 years.