Businesses allege BB, ICB harassment in getting loan

New Age | Newspaper: Businesses allege BB, ICB harassment in getting loan

Equity and Entrepreneurship Fund on 27/04/2011 00:06:00

Staff Correspondent

Entrepreneurs of agro-based industries on Tuesday blamed the Bangladesh Bank and Investment Corporation of Bangladesh for the harassment they have to face in getting loans from the Equity and Entrepreneurship Fund. They came up with their complaints in the EEF Conference 2011, jointly organized by the BB and ICB in the National Sports Council’s auditorium. EEF is a capital formation process which was developed in the year 2000 to finance the risky sectors which have a lot of potential, especially agro-based, agro-processing and information technology industries. The interest rates are much lower than those taken by commercial banks, and sometimes loans are given at zero interest. In 2009 the central bank handed over the charge of operating the EEF to the ICB but retained the authority of policy-making, fund management and monitoring of the fund. In the conference the entrepreneurs complained of improper inspection by the project inspectors’ teams, unnecessarily lengthy process of granting and
releasing funds, granting loans lower than required, illegal and illogical charges by the credit managers, inefficiency of credit managers, tortuous procedures, lack of managers’ goodwill and a lot of other kinds of harassment by the authorities.
Atiur Rahman, the BB’s governor, assured the entrepreneurs that the loan granting procedures would be simplified and all the problems would be solved as far as possible. He said some 3,000 applications for loans have been received which need sufficient time to be processed.
The bank does not have enough manpower to process the applications at the required speed so it takes more time to grant and release funds, he added.
Atiur asked the ICB and BB officials in charge of the EEF to narrow down the gap between the entrepreneurs and credit managers.
Entrepreneur Farhana Anwar, expressing frustration at the complex procedures of granting loans and releasing funds, said, that they had to answer a lot of questions asked repeatedly by the credit managers, and it sometimes take around three years to satisfy them and get a loan. ‘When we get funds after satisfying the credit managers, the projects have become sick in the meantime and implementation becomes impossible,’ she added.
Another investor, Asadul Haque, said they had to face a lot of complexities and spend a lot of money before getting the grant.
‘I had to come to Dhaka more than 20 times, and I had to spend a large amount of money for travel fare and hotel rent. Moreover the loan I was given was very low in comparison to my equity capital and land,’ he added.
He blamed the inspectors’ team for improper and delayed inspection.
‘The inspectors do not come in time in spite of our repeated requests, they take an unnecessarily long time for inspection and we have to spend a lot of money for them.’ he said. ‘Their assessment is also illogical.’ At one stage of the conference, the entrepreneurs became angry as they were not allowed to air their problems due to shortage of time. Later Atiur requested them to send their objections in written form to the Bangladesh Bank and assured them that action would be taken if any irregularities were found.
ICB’s managing director Muhammad Fayekuzzaman, Bangladesh Agricultural
University’s vice-chancellor MA Sattar Mandal, BB’s executive director
Dasgupta Asim Kumar, high government officials and entrepreneurs were present on the occasion.
Faykuzzaman echoed Atiur by saying that it was not possible to process the large number of applications quickly due to shortage of manpower.
However, he denied the allegations of harassment of entrepreneurs and improper inspection and shrugged off other complaints.
Dasgupta Asim Kumar said they have already reduced the number of instalments to three from four to make the disbursal of loans faster.