Dhaka, Bangladesh (BBN)- Upward trend of private sector credit continued in November last, suggesting that the country’s overall business activities have started improving, officials and bankers said on Sunday.
Private sector credit growth rose to 16.73 per cent in November from 15.42 per cent in October last year, according to the central bank statistics.
Credit flow to the private sector witnessed a rising trend in October after a month of declining growth. The private sector credit growth rose to 15.42 per cent in October from 13.65 per cent in September, the lowest in nearly last two years.
“The credit flow to private sector increased due mainly to the rise in financing small and medium enterprises (SME), agriculture and trade sectors,” a senior official of the Bangladesh Bank (BB) said.
He also expects that the upward trend of private sector credit may continue in the near future due to recovery of major economies from the global meltdown and restoration of confidence of the country’s business community.
“The major economics in the world have been recovering from the global financial criers with rising trend of prices of commodities in the international market that would also be pushed in private sector credit flow in the country,” the BB official added.
Besides, the credit demand for agriculture sector will pick up during the months of January and February because of the ongoing boro cultivation season, he noted.
The credit flow to private sector recorded a growth of 16.73 percent to BDT 340.175 billion in November 2009 on a year-on-year basis compared to 24.31 percent or BDT 397.611 billion of the previous year, the BB’s data showed.
“We expect that the upward trend of private sector credit flow will continue in the near future,” Agrani Bank Limited Managing Director and Chief Executive Officer Syed Abu Naser Bukhtear Ahmed told BNN in Dhaka.
He also said credit flow to private sector would grow gradually as soon as better supply of gas and power in industrial units will be ensured.
Both the BB officials and senior bankers expect that private credit flow will increase sharply after announcing the guidelines on Public Private Partnership (PPP) investment initiative.
Disbursement of agricultural credit during July-November 2009 stood at BDT 42.49 billion compared to BDT 33.78 billion in the same period of the previous year, the central bank said.
“Recovery of agriculture credit during July-November 2009 also stood higher at BDT 40.49 billion compared to BDT 22.70 billion during July-November 2008,” the central bank said in its ‘Major Economic Indicators: Monthly Update’- December 2009.
BBN/SS/SI/AD-19January10-12:30 am (BST)
