Dhaka, Bangladesh (BBN) – Most of the visitors at the Banking Fair Banladesh-2015 are interested to avail loans from banks at lower interest rates for expansion of their businesses.

BBN reporters talked with a number of visitors and found that they were not satisfied with the offered interest rates on lending by the banks, particularly for small and medium enterprises (SMEs) and consumer financing.

“We want to make our business profitable after getting loans at reasonable interest rates,” Kamrul Hasan, a visitor at the fair, told the BBN.

Mr Kamrul also said he is interested in expanding his business with bank loan but the interest rates on lending are not favorable for him.

Expressing his frustration, Mr Kamrul said he cannot understand how to make business viable with such higher rates of interest on lending.

A number of visitors also expressed their frustration like Mr Kamrul.

Most of the banks are now offering around 7.0 per cent interest rate on fixed deposit, while charging between 12 per cent 20 per cent on lending, according to the visitors.

“Higher volume of non-performing loans (NPLs) has forced the banks to charge more on lending for minimising their cost of funds,” a senior banker explained to the BBN.

He also said interest rates on lending are maintaining a declining trend in the recent months despite rising trend of the NPLs.

The amount of NPLs rose by more than 4.0 per cent to BDT 547.08 billion during the July-September period of this year, from BDT 525.19 billion in the preceding quarter (Q2), according the central bank’s latest statistics.

The share of NPLs in the total outstanding loans of the banking system also rose to 9.89 per cent in Q3 of 2015, from 9.67 per cent in Q2. It was 10.47 per cent in Q1 of this year.

The senior banker also expects that the falling trend of lending will continue in the coming months, if lower credit demand persists.

Besides, lower interest rates on the government securities and call money have also pushed up the banks to slash their interest rates on lending, the banker noted.

The inter-bank call money rate fell further to minimum 2.25 per cent on Thursday following suspension of reverse REPO (repurchase agreement) acceptance by the central bank.

The call rate ranged between 2.25 per cent and 4.50 per cent on the day unchanged from the previous level. But most of the deals were made at rates between 3.0 per cent and 4.0 per cent, according to the market operators.

Bangladesh Bank Governor Dr Atiur Rahman inaugurated the five-day long fair on Bangla Academy ground in Dhaka where the fair has been going on since November 24.