50% of borrowers to default if loan moratorium not extended: FBCCI president

Business leaders have once again demanded more time to repay loans they availed under stimulus packages, saying that the country’s trade and commerce are still bearing the brunt of the ongoing coronavirus pandemic.

Agreeing with the demand, Md Jashim Uddin, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), said, “At least 50 percent of the borrowers will be defaulters if the term of the loan classification facility was not extended.”

He said this at a meeting of the Council of Chamber Presidents-2022 at the FBCCI auditorium on Saturday.

President of different district chambers and FBCCI directors spoke on the occasion and demanded an extension of the loan moratorium time till June this year.

Since the coronavirus struck Bangladesh in March 2020, the government and the central bank announced around two dozen packages to stimulate business and economic activities in the country.

Bangladesh Bank extended the loan moratorium several times till December 2021.

Accordingly, a quarter of businesses have become concerned as they think they won’t be able to repay the loans as the coronavirus situation worsened in recent days.

The FBCCI president said the sectors whose business activities were shut down under the instruction of the government to control the coronavirus pandemic have not yet received incentive loans.

Small and medium entrepreneurs have been most affected by the epidemic. But while other incentive funds were almost 100 per cent discounted, a large portion of SME incentives are yet to be distributed.

Noting that banks are reluctant to provide small loans to small and medium enterprises, the FBCCI president said the banks think it is not profitable to provide small loans.

They think lending to the big business sector reduces the manpower and cost of the bank.

However, this idea is wrong, rather it increases the risk of bad debt, he said.

FBCCI President Md Jashim Uddin called upon the government to keep the private sector in the policy-making meeting to create a business-friendly environment in the country.

He said the private sector contributes 82 percent to the economy.

Therefore, as a representative of the private sector, it is important for the FBCCI to have a say in any policy formulation, he said.

The meeting was chaired by Mostofa Azad Chowdhury Babu, President of the Council of Chamber Presidents and Senior Vice President of the FBCCI.

He said businesspeople are still being harassed in the country for collecting taxes and VAT.

“Company law, import and export law are being renewed. The FBCCI is working to make these laws business friendly,” he added.

Presidents and vice-presidents of various chambers from across the country demanded that the FBCCI president be accorded the status of a state minister.

They said that government officials formulate policies on their own without understanding the reality. As a result, many times these policies are not implemented.

In order to create a business-friendly environment, there should be an opportunity for the FBCCI to have a say in policy-making meetings, they opined.

At the same time, the businessmen complained that the revenue officials are creating an environment of harassment and intimidation for them in various ways to collect revenue even in the midst of business disruption in the pandemic.

Even after being affected by the pandemic, small and medium entrepreneurs at the district level complained that they were not getting the incentives announced by the government.

Due to this, the post-epidemic transition of the marginal business is becoming difficult, they said.

In addition, the implementation of a single account in the audit will bring disaster to the whole economy, the businessmen said.

They said that 33 licences are needed to set up a factory. Entrepreneurs have to suffer a lot to get these certificates.

The speakers demanded the introduction of a one-stop service to solve this problem.

FBCCI Vice-Presidents Md Aminul Haque Shamim, Md Amin Helaly, Salahuddin Alamgir, Habib Ullah Dawn, MA Razzak Khan Raj and Secretary General Mohammad Mahfuzul Hoque were also present at the meeting.