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"<!-- wp:paragraph -->\n<p>Private sector credit growth increased slightly in February of the current FY, to keep pace with the recovering trend of the economy. The credit growth has increased moderately due to the rising demand for loans ahead of PohelaBoishakh and Eid-ul-Fitr – the two biggest festivals in Bangladesh.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>In February, private sector credit growth stood at 8.93 per cent, up from 8.32 per cent in the previous month. However, in February last year, the private sector credit growth plunged to 9.13 per cent.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>As businesses remained indifferent about making fresh investments amid the pandemic, the credit growth has been loitering around the 8 per cent mark for a few months.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>However, the figure is 6.48 per cent lower than the Bangladesh Bank’s target for this fiscal year.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Now some small and medium businesses have created a demand for loans on centering the upcoming festivals, but the overall demand for loans have yet to increase, said experts.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Bankers say the rising coronavirus infections and deepening uncertainty have dipped the growth in March.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Md Arfan Ali, managing director of Bank Asia said, there was a possibility that the credit growth might rise in March to some extent as the majority of banks normally tried to inflate their credit book in the last month of every quarter.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>But the ongoing trend will create a pressure on the credit growth in May and June, Ali said.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Besides, the credit demand did not rise in full swing as several sectors, including education, are still affected by the coronavirus-induced economic slowdown, said Dhaka Bank Managing Director Emranul Huq.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The country’s educational institutions are still shut and many sectors are connected with the educational activities, which is one of the reasons for the slow credit demand, he added.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Private sector credit growth may drop from the 8 per cent mark in the upcoming days as the second wave of the Covid-19 pandemic has already hit the country, said the Dhaka Bank managing director.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>“Our economy has yet to bounce back fully, so the businesses are going slow with their investment plans,” Huq added.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Between February and June last year, private sector credit growth consistently dropped when the global coronavirus pandemic was at its most ominous form.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>From 9.2 per cent in January, it came down to 8.6 per cent in June last year as the lenders refrained from disbursing credit during the countrywide shutdown from March 26 to May 30.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>“A large number of businesspeople are not showing their interest in expanding business,” said AB Mirza Azizul Islam, a former adviser to a caretaker government.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>On the other hand, the loan disbursement has declined to a large extent this month as credit appetite has decreased due to the upward trend of the infection.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>\"We have observed that export orders from European countries have started declining as some of them have recently declared strict restrictions on movement in order to tackle the spread of the coronavirus,” said Emranul Huq, managing director of Dhaka Bank.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Lower exports have a spillover effect in imports, he said.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The imported items of industrial raw materials are largely used to produce the exported goods.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The lower imports have also brought a negative impact explicitly on the credit growth as well, Huq said.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>\"I do not see any ray of hope to rise in imports in the next few months given the gravity of the coronavirus infection at home and abroad,\" he said.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The outstanding loans in the private sector stood at Tk 11,53,511 crore as of February in contrast to Tk 11,40,023 crore the previous month.    </p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Source:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p><a href=\"https://www.dhakatribune.com/business/banks/2021/03/29/private-sector-credit-growth-up-slightly-centring-festivals\">DHAKA TRIBUNE</a></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p><a href=\"https://www.thedailystar.net/business/news/credit-growth-rises-moderately-2068561\">THE DAILY STAR</a></p>\n<!-- /wp:paragraph -->"
<https://bizdatainsights.com/private-sector-credit-growth-increased-moderately-ahead-of-festivals/>