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Foreign loans to private corporate groups dropped in 2013

Private corporate groups of Bangladesh received less foreign loans in 2013 compared to the year before. The volume of foreign loans declined due to political unrest and frequent workers’ protest throughout the year. It is an indication that foreign loans providers have lost a share of interest in giving loans to Bangladeshi corporate groups due to the lack of investment friendly environment in the country. To add to the farce, Import orders on capital machinery came to almost a halt. 

The Board of Investment expected at the start of 2013 that the flow would increase. In reality, it did not. Board of Investment approved foreign credit worth $1.19 billion in 2013 compared to $1.50 billion in 2012. Fear factor is that it might continue the falling trend in 2014 as most international loans providing organizations adopted a wait and see policy.

Volatile political environment is a serious no-go factor for any foreign loan providers. The second in line in the no-go list is workers’ unrest. Both these factors were eating out the Bangladeshi economy throughout the year.

Flow of foreign loans dropped in almost every sector including pharmaceuticals, telecommunication, power, textile, cement and steel. It is no surprise that present business environment is not at all investment-friendly. Most of the business activities including export and new investment initiatives suffered in the past 12 months. Even the top corporate groups including Ha-Meem Group, Newage Group, ACI, Paradise group are struggling in ensuring loans from international providers.

The government set a 7.2% growth target for 2013-14 fiscal year. This is likely to fail considering the political situation is yet to improve.



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