Businesses in Chattogram have called for the introduction of a “Sick Industries Law” to help revive struggling and closed industrial units, citing a sharp decline in the number of active factories in the region.
The proposal was raised on 9 August at a stakeholder consultation meeting organised by Bangladesh Bank at Hotel Radisson Blu in Chattogram to discuss implementation of a Tk60,000 crore incentive package.
Maruf Chowdhury, Vice-President of the Chattogram Metropolitan Chamber of Commerce and Industry and a member of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said more than 6,000 factories were once listed as operating in Chattogram, but only around 2,700 remain active.
He proposed introducing legislation similar to sick-industry laws used in developed countries to create a structured mechanism for rehabilitating viable but financially distressed industrial units.
Bangladesh Bank Governor Md Mostaqur Rahman said the country’s conventional mortgage-based lending system has failed to achieve the desired results in reducing non-performing loans.
He argued that banks should place greater emphasis on the cash flow generated by businesses, rather than relying primarily on collateral or mortgages when assessing borrowers.
Tk20,000 Crore Allocated for Closed Industries
Under the Tk60,000 crore incentive package, Tk41,000 crore will come from excess liquidity held by scheduled banks, while Tk19,000 crore will be financed directly by Bangladesh Bank.
The largest allocation under the Tk41,000 crore component is Tk20,000 crore for closed industries and service-sector businesses. Banks will receive funds at 4% interest and lend to customers at 7%.
The package also includes Tk10,000 crore for agriculture and the rural economy, Tk5,000 crore for CMSMEs, and Tk3,000 crore each for export diversification and the northern agricultural hub.
Bangladesh Bank Funding
Of the Tk19,000 crore to be provided directly by Bangladesh Bank, Tk5,000 crore has been allocated for pre-shipment credit refinancing. Banks will receive the funds at 2% and lend to customers at 5%.
Another Tk5,000 crore has been allocated for cottage and micro enterprises. The frozen shrimp and fish export sector and the leather goods and footwear export sector will each receive Tk2,000 crore.
The package also provides funding for overseas employment, youth employment, rural economic activities, green refinancing, the creative economy and startups.
Package Targets 2.5 Million Jobs
Governor Mostaqur Rahman said the programme should not be viewed simply as a lending initiative. Instead, it is intended to support investment, production, economic recovery and employment generation.
The overall programme aims to create approximately 2.5 million new jobs.
He also highlighted the “One Village, One Product” concept as a potential way to promote products from Chattogram’s coastal and hill regions in international markets, potentially supporting local production and export earnings.
Entrepreneurs Urged to Utilise Available Schemes
The governor noted that Bangladesh Bank currently operates 31 refinancing and pre-financing schemes, but many genuine entrepreneurs remain unaware of the available facilities because of inadequate dissemination of information.
As a result, some funds allocated under incentive programmes are not being fully utilised.
He urged banks, business organisations and entrepreneurs to work together to ensure that information about the financing schemes reaches eligible businesses at the grassroots level.
During a nearly two-hour question-and-answer session, representatives from Chattogram’s chambers, business organisations, entrepreneurs and regional bank offices raised concerns over industrial-sector challenges and sought clarification from the Bangladesh Bank governor.
