Prime Minister’s Stimulus

Packages
 1

Prime Minister Sheikh Hasina today

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.