A study has found that entrepreneurs’ lack of confidence in the country’s investment environment slowed down banks credit flow.
It has also seen that entrepreneurs’ easy access to overseas loans is affecting the domestic credit flow.
The report of the study, conducted by the Bangladesh Bank Banking Regulation and Policy Department (BRPD) Joint Director Bayezid Sarker, says entrepreneurs are not opting for new investments fearing political unrest in the coming days.
A discussion was held on the report at the Bangladesh Bank conference hall on Thursday.
Senior central bank officials including its Deputy Governor SK Sur Chowdhury were present at event.
The report says though currently most of the financial indexes of the country are ‘positive’ and the economy sees stability, credit flow is experiencing a slow down.
One of the main reasons is that loan beneficiaries and entrepreneurs lack ‘enough’ confidence in the country’s investment environment.
It says ‘excessive caution’ and ‘uneasiness’ on the part of the banks in disbursement of loans have also negatively impacted the credit flow.
It adds that the demand for credit from local banks has declined as the entrepreneurs get easy access to low-interest foreign loans.
The official conducting the study suggested imposition of restrictions on utilisation of foreign loans.
The central bank, in its monetary policy for Jan-Jun period this year, set a 16.5 percent year-on-year growth in credit flow to the private sector, but at April-end, the growth rate stood at 11.9 percent.
The report says idle money in banks stood at Tk 275 billion at the end of Mar this year.
Source: Bd news24