10 private companies to borrow $85.7 million from overseas sources

Dhaka, Bangladesh (BBN) – Private companies will be able to get access to more loans — amounting to an aggregate sum of US$85.7 million — from the overseas sources shortly to help expand their business activities, officials said.

 

Ten cases for their obtaining loans were approved at a meeting of the scrutiny committee for approval of foreign loans or supplier’s credit held in the central bank on Wednesday with Bangladesh Bank (BB) Governor Atiur Rahman in the chair.

 

“We expect that most of the funds will be received from the overseas sources within the next three months,” a senior official of the central bank, who is now working at the foreign loan security desk in the Board of Investment (BoI), told BBN in Dhaka.

 

Of the approved loans, Regent Energy & Power Limited will receive$50.2 million along, he said, adding that TM Textile & Garments Limited will borrow $10.59 million from overseas sources.

 

Besides, the committee approved eight other cases of external loans– $ 5.0 million for Blue Ocean Limited, $7.8 million for Uttara Foods & Feeds Limited, $3.79 million for Epyllion Style Limited, $2.0 million for Dada (Dhaka) Limited, $1.819 million for Masi Hata Sweaters Limited and the remaining amount for other three projects.

 

“The corporate entities are interested to borrow from overseas sources due mainly lower interest rate and easier process,” another BB official said, adding that the average highest interest rate of the loans is six-month LIBOR+4.00 per cent, which is no more than 5.00 per cent.

 

Currently, the local banks are providing loans to large and medium-scale industrial units at rates of interest ranging between 12.50 per cent and 17.00 per cent, and to small industries, at between 13.00 per cent and 19.50 per cent, according to the central bank statistics.

 

“Such foreign funding will be helpful to keep the foreign exchange market stable. It will also help to improve the balance of payments situation,” the central banker noted.

 

The flow of overseas loans, received by the private sector, increased by 81.93 per cent to $1.490 billion in 2012 from $819 million in the previous calendar year, the BB data showed. 

 

The committee is now processing more foreign financing proposals for approval, according to the central bank officials.  

 

BBN/SSR/AD-06Feb13-10:48 pm (BST)