The Dhaka Chamber of Commerce and Industry (DCCI) has urged the central bank to enhance credit flow to Cottage, Micro, Small, and Medium Enterprises (CMSMEs).
The trade body expressed concern that a rise in interest rates could slow down credit access, particularly for CMSMEs.
It suggested that Bangladesh Bank's existing schemes for SME financing be accelerated to support this sector more effectively.
The DCCI's call came during a meeting between its board of directors, led by President Ashraf Ahmed, and Bangladesh Bank Governor Dr Ahsan H Mansur on Tuesday at Bangladesh Bank.
During the meeting, the DCCI President also advocated for streamlined processes for foreign trade credit and foreign loan processing, as well as increased credit flow to banks. He further urged the central bank to take steps to reduce the interest rate burden on loans to CMSMEs, emphasizing that this policy should not be prolonged and that rates should be lowered as soon as feasible.
Ashraf Ahmed highlighted the importance of controlling inflation, noting that it not only raises living costs but also increases business operational expenses. He added that a reduction in bad loans could lead to lower lending interest rates. He also welcomed the central bank's initiatives to stabilize the country’s financial sector.
The DCCI President emphasized that to foster the growth of the CMSME sector, it is essential to manage the pressure of rising interest rates while maintaining credit flow.
Bangladesh Bank Governor Dr Ahsan H Mansur responded by stating that if inflation can be reduced to a manageable level within the next 6-7 months, a reduction in policy and other interest rates would be possible. He stressed the importance of boosting deposit growth in the banking sector to double digits and making credit guarantee facilities for SMEs more operational. The Governor also underscored the need to limit government borrowing to increase credit flow to the private sector.
He noted that improving payment history and credibility would help entrepreneurs secure foreign trade credit. The Governor also mentioned the upcoming formation of a banking commission, which will develop a roadmap to stabilize the financial sector. Additionally, he advised new investors to consider investing in special economic zones to access comprehensive facilities.
Deputy Governors of Bangladesh Bank, Nurun Nahar and Dr. Md. Habibur Rahman, along with DCCI Senior Vice President Malik Talha Ismail Bari, Vice President Md. Junaed Ibna Ali, and other board members, were present at the meeting.