Business leaders have called on the Bangladesh Bank (BB) to bring loan interest rates down to single digits, warning that the current high rates are hurting business growth and competitiveness.
During a meeting with Bangladesh Bank Governor Ahsan H Mansur on Tuesday, representatives from leading trade bodies said that lower lending rates in the upcoming monetary policy would particularly help small and medium-sized enterprises (SMEs).
The 14-member delegation included representatives from the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), and Bangladesh Textile Mills Association (BTMA). Senior central bank officials, including deputy governors, also attended the meeting.
Following the discussion, FBCCI Secretary General Md Alamgir said the current interest rate—now above 14 percent—was “unfriendly to businesses.”
“In a competitive market, SMEs make profits of only 10 to 11 percent. Paying over 14 percent in interest makes it nearly impossible for them to remain viable in the global market,” he said.
Alamgir urged the central bank to gradually reduce interest rates to single digits, in coordination with efforts to curb inflation and attract new investment. He added that Governor Mansur assured the business delegation that the policy rate would be brought down in the next monetary policy statement.
Alamgir also highlighted the lingering impact of the Covid-19 pandemic, the Russia-Ukraine war, floods, and political uncertainty on local businesses.
He proposed extending the tenure of a special committee formed to restructure loans and support affected borrowers, noting that the committee’s mandate expired in September. Alamgir sought a six-month extension and the creation of a new committee to assess loans under Tk50 crore, aimed at providing targeted policy support.
“The governor assured us that the process would continue and that forming the new committee would not be an issue,” Alamgir said.
He further raised the banking challenges faced by export-oriented industries, calling for a dedicated committee within Bangladesh Bank to address export finance bottlenecks. Alamgir said the governor agreed and assigned a deputy governor to oversee these matters directly.
“With this mechanism in place, we’ll be able to coordinate more effectively and resolve issues quickly,” Alamgir added.