Retaining returnees in villages: Bangladesh Bank launches big scheme
Bangladesh Bank (BB) has launched a Tk 5-billion refinancing scheme to create jobs for the people who have migrated from urban areas to villages amid the Covid-19 pandemic with a focus on women.
The central bank will provide funds from its own sources to give loans to the unemployed and self-employed people of the informal sector for involving them in the production line to strengthen the rural economy.
The people of such category will get loans of Tk 200,000 to Tk 500,000 at 6 per cent interest for a two-year to three-year period with a three-month to six-month grace period.
Minimum 10 per cent of loan will have to be distributed among the women entrepreneurs under the Tk-5 billion refinance programme, which is expected to be increased considering the situation.
The central bank’s agriculture credit department issued a circular on Monday emphasising the importance of revitalizing the rural economy following the Covid-19 the shock.
Participatory banks can disburse such loans through their own branches, sub-branches, agent banking outlets and mobile banking systems. Banks cannot distribute the loans through micro-finance institutes or NGOs, the circular says.
The loan disbursement period of this fund is fixed at 31 December 2024, and loan collection period will be continued as per loans’ schedule.
The central bank will provide funds to the participatory banks as per demand with 0.5 per cent of interest rate while the banks will charge a maximum 6 per cent of interest from the clients/borrower level.
The loan disbursement will be preferred to local businesses with small capital, small and medium transport purchase, micro-engineering industry, fisheries, cattle farming, chicken-duck rearing, information service centre, vegetable firming and purchasing agriculture equipment and crops harvesting machine.
According to a report released by UNB on 6 July 2020, over 60,000 tenants reportedly have left the capital with their bags and baggage having failed to maintain a roof over their heads and daily expenses as coronavirus has wiped out their jobs and sources of income.
Even though the economic activities have resumed amid the corona pandemic, many people are not getting back their jobs making it impossible for them to stay in the capital city.
Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), said last year that around 12.5 million people either fully or partially lost opportunities for earnings, and majority of them live in cities.