The Prime Minister of Bangladesh unveiled a stimulus package totaling 72,750 crore taka (US$8.6 billion) to mitigate the economic impacts of COVID-19. The package includes four programs: increasing public expenditure; formulating stimulus packages; widening social safety nets; and increasing monetary supply. One component is 20,000 crore taka in working capital for small and medium enterprises through banks, with interest rates of 9% and the government subsidizing 5% of interest costs. Another adds 12,750 crore taka to export development funds and lowers interest rates to 2%. The stimulus aims to provide affordable credit to industries, businesses, and exporters affected by the pandemic.
The Prime Minister of Bangladesh unveiled a stimulus package totaling 72,750 crore taka (US$8.6 billion) to mitigate the economic impacts of COVID-19. The package includes four programs: increasing public expenditure; formulating stimulus packages; widening social safety nets; and increasing monetary supply. One component is 20,000 crore taka in working capital for small and medium enterprises through banks, with interest rates of 9% and the government subsidizing 5% of interest costs. Another adds 12,750 crore taka to export development funds and lowers interest rates to 2%. The stimulus aims to provide affordable credit to industries, businesses, and exporters affected by the pandemic.
The Prime Minister of Bangladesh unveiled a stimulus package totaling 72,750 crore taka (US$8.6 billion) to mitigate the economic impacts of COVID-19. The package includes four programs: increasing public expenditure; formulating stimulus packages; widening social safety nets; and increasing monetary supply. One component is 20,000 crore taka in working capital for small and medium enterprises through banks, with interest rates of 9% and the government subsidizing 5% of interest costs. Another adds 12,750 crore taka to export development funds and lowers interest rates to 2%. The stimulus aims to provide affordable credit to industries, businesses, and exporters affected by the pandemic.
unveiled the government work plan to overcome the possible COVID-19 impact on the country’s economy, declaring an allocation of Taka 72,750 crore under a set of stimulus package. Earlier she declared a Tk 5,000 crore (emergency) incentive package for paying salaries and allowances of export-oriented industries workers and employees and today she announced four fresh financial stimulus packages of Tk 67,750 crore. The government simultaneously took four programs under the work plan to be implemented in phases categorized as “immediate, short and long”. The four programmes are: increasing public expenditure, formulating a stimulus package, widening social safety net coverage and increasing monetary supply. The four policies are given below: first of the four packages involved Taka 30,000 crore, to be provided to affected industries and service sector organizations as working capital through banks as low- interest loan. The commercial banks would provide the amount as loans from their own funds to concerned industries and enterprises on the basis of bank- client relations. The interest rate of this lending facility will be 9 percent, and the concerned industries and business organizations will pay 4.50 percent interest, meaning half of the interest of that loan, while the government would pay remaining half to banks as subsidy. Second package, small and medium enterprises (SMEs) including cottage industries would get Taka 20,000 crore as working capital. A mechanism would be devised to reach the amount to the SMEs as low-interest loans through banks which identically will disburse amounts to the SMEs on the basis of bank-client relations while the government in this case would bear the greater share of the interest amount. The interest rate of this lending facility will be 9 percent and the concerned industries and business organisations will pay 4 percent interest of that loan, while the government will provide the remaining 5 percent as subsidy. The third package was meant for enhancing Bangladesh Bank’s Export Development Fund or EDF size from US$3.5 billion to $5billion to facilitate raw materials imports under back-to-back LC. Last package would result in adding an amount of additional Tk 12,750 crore equivalent to $1.5 billion to the EDF while its interest rate would simultaneously be brought down to 2 percent. We will be under the 2nd package which is for SME’s and Start-ups. As this is totally a new financial policy there’s any clear instructions for the banker about the loan sanction process.