A file photo shows workers are busy at a garment factory in Dhaka. The growth in industrial credit disbursement and recovery fell sharply in the first nine months due to a liquidity crisis in the financial sector and prevailing power and gas shortage. — New Age photo

The growth in industrial credit disbursement and recovery fell sharply in the first nine months of the current financial year compared to that of the corresponding period of the FY2010-11 due to a liquidity crisis in the financial sector and prevailing power and gas shortage in the industrial sector.
According to the latest BB data, disbursement of industrial loans by banks and non-bank financial institutions grew by 4.55 per cent in July-March of this financial year whereas the loan disbursement rose by 27.07 per cent in the same period of the previous financial year.
Banks and NBFIs disbursed Tk 81,253 crore as industrial loans in July-March this financial year against Tk 77,720 crore in the first nine months of FY2010-11. The total loan disbursement in July-March of FY2009-10 was Tk 61,165 crore.
BB data showed the growth in recovery of the industrial credit in July-March of FY2011-12 increased by 16.59 per cent compared to a 32.49 per cent growth in the same period of the previous financial year.
The credit recovery in the first nine months of the current financial year stood at Tk 71,239 crore against Tk 61,101 crore in the same period of the FY2010-11. The loan recovery in July-March of FY2009-10 was Tk 46,117 crore.       
A BB official told New Age on Sunday that persistent liquidity crisis in the banks and NBFIs had hit the growth in the industrial loan disbursement. The financial sector has been facing deposit shortage and that has affected the disbursement, he said.     
 ‘Lower loan disbursement means that the country’s industrialisation process is going through a declining trend. The industrial production may drop in the coming months,’ the official warned.       
He said the contractionary monetary policy taken by the central bank had also affected the loan disbursement status.
BB has taken a stance to squeeze money supply in the market to curb the high inflation, he said.
Another BB official said a number of industries have been facing production crisis for the last few months due to the prevailing power crisis and gas shortage.
For this reason, the entrepreneurs have failed to expand their business during the period, he said.
As a result, they are reluctant to apply to the bank for loans, he said.
Due to the declining trend of production in the industry, the loan recovery by the banks and NBFIs drastically reduced in the first nine months, he said.
He said the slow pace of growth in loan disbursement and recovery was not desirable.
‘The government should make efforts to mitigate the prevailing power crisis in the industrial sector, otherwise it would create an adverse situation on the country’s gross domestic products,’ he said.  
BB data showed the liquidity crisis in the banks and NBFIs and power crisis in the industrial sector had also hit the industrial term loan disbursement. 
Industrial term loan disbursement by banks and NBFIs increased by 2.34 per cent in July to March of FY2011-12 compared to a 30.06 per cent growth in the same period of the FY2010-11.
The total disbursement of industrial term loans in July-March of this financial year stood at Tk 25,059 crore against Tk 24,487 crore in the same period of the FY2010-11. The term loan disbursement in the first nine months of FY2009-10 was Tk 18,827 crore.
BB data showed the growth in recovery of the industrial term loan in July-March of FY2011-12 increased by 15.76 per cent compared to a 46.19 per cent growth in the same period of the previous financial year.
The credit recovery of the industrial term loans in the first nine months of the current financial year stood at Tk 22,347 crore against Tk 19,304 crore in the same period of the FY2010-11. The loan recovery in July-March of FY2009-10 was Tk 13,205 crore.