Hasina Approves new stimulus package of Tk 2700Cr

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The Bangladesh government has so far rolled out 23 bailout packages announced at different times since March 2020 to absorb the economic shock from the raging Covid-19 pandemic….reports Sumi Khan.

On Sunday, Prime Minister Sheikh Hasina approved two new schemes worth Tk 2,700 crore aimed at improving the living conditions of rural marginalised people, according to a Finance Ministry statement.

The government has not yet decided on the interest rates for the loans to be provided through all these organisations and agencies.

But the beneficiaries will get the loans at a reduced rate, an official at the Ministry said.

Before releasing the funds, the Finance Division will discuss and review their existing rates and fix it.

The implementation of the new packages will begin soon, the Finance Ministrystatement said.

The total amount of financial assistance now stands at Tk 124,053 crore, 4.44 per cent of the country’s GDP.

The approval of the new schemes comes following recommendations from various stakeholders during a series of dialogue organised recently by the Ministry on overall aspects of the stimulus packages.

At the discussions, business leaders, government officials and representatives from banks, development partners and agencies suggested expanding the credit coverage through government and semi-government agencies related to the cottage industry and small and medium enterprises (SMEs).

They also recommended steps to improve the living standards of marginal people and expand the social safety coverage for the poor, added the statement.

Under the first package involving Tk 1,500 crore, the government will give loans to micro and cottage entrepreneurs through various government and semi-government agencies like the SME Foundation, the Bangladesh Small and Cottage Industries Corporation (BSCIC) and Bangladesh NGO Foundation to infuse dynamism into the rural economy amid the pandemic.

Of the amount, Tk 300 crore will be provided to the SME Foundation for expanding its operations for the cottage industry and SMEs alongside helping the female entrepreneurs.

The SME foundation will disburse loans among the small businesses and entrepreneurs hit hard due to the economic downturn caused by the pandemic, according to Finance Ministry officials.

Besides, BSCIC will get Tk 100 crore under the package. The state-run corporation, established to support small initiatives across the country, will provide loans to small entrepreneurs and industrial units set up in the BSCIC estates under its existing credit programmes.

The package also includes financial support for business initiatives by women who suffered due to the economic slowdown.

Joyeeta Foundation, a government initiative to support women’s ventures and empower women financially, will get Tk 50 crore. Apart from the loans, the foundation will provide training to women entrepreneurs.

The NGO Foundation will get Tk 50 crore for providing small loans through NGOs.

Besides, Social Development Foundation, Palli Daridro Bimochon Foundation, and Bangladesh Palli Development Board will get Tk 300 crore each and Small Farmers Development Foundation Tk 100 crore.

In March 2020, the government announced a Tk 20,000-crore stimulus package for the cottage, micro, small and medium enterprise (CMSME) sector after the pandemic hit the country.

However, the disbursement rate of the loans was low compared to that for the large industrial and service sectors.

Faridpur, July 20, 2020 (Xinhua) — Photo shows flood-affected houses in Faridpur, Bangladesh, July 19, 2020. Floods triggered by heavy seasonal rains and onrush of water from hills have worsened again in parts of Bangladesh, including central Faridpur district, some 101 kilometers away from the capital Dhaka. (Xinhua/IANS)

Under the Tk 1,200-crore package, all disadvantaged elderly people, widows and female divorcees in 150 poverty-stricken upazilas of the country will get cash assistance.

The beneficiaries will get an allowance of Tk 500 a month. The package will be implemented in fiscal 2021-2022.

The amount is likely to increase by 5 per cent from the next budget as the Finance Ministry has already made a decision in this regard, said an official of the ministry.

However, the government is yet to finalise the number of beneficiaries.

It started giving the cash incentives to all those who fall under the beneficiary groups in 112 poverty-stricken upazilas after the pandemic hit the country.

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