Only 24 percent released from 15 funds worth Tk 60,000 crore, three-quarters of the money lying unused

Slowness has appeared in the release of money from 15 special funds worth Tk 60,000 crore, formed with the goals of increasing agricultural production, creating employment, giving incentives to small and medium entrepreneurs and reviving the rural economy. According to central bank data, as of 15 October, progress — combining money distributed and money in the process of release — stands at only 24.20 percent of the total allocation.

According to the accounts, it has so far been possible to distribute Tk 11,959 crore 82 lakh against these schemes. Beyond this, the release of a further Tk 2,559 crore 97 lakh is in process. The two together come to Tk 14,519 crore 79 lakh. That means about 75.80 percent of the allocation has not yet been possible to use at all.

These funds have been formed under refinancing and pre-financing facilities — when banks give loans in the relevant sectors, the central bank supplies that money. As a result, the funds' money not being released means the expected loan facilities have not reached the entrepreneurs of the intended sectors and beneficiaries at the marginal level.

However, there is a positive picture in a handful of schemes too. In the pre-shipment credit refinancing scheme, more money has been distributed than the allocation — Tk 6,917 crore has been released against an allocation of Tk 5,000 crore. The entire Tk 500 crore fund formed for the creative economy has been fully distributed.

In the fund for creating new entrepreneurs in the cottage and micro sectors, Tk 2,500 crore out of Tk 5,000 crore has been released. And against the CMSME sector working capital fund of Tk 5,000 crore, Tk 907 crore 73 lakh has been released. However, in these two sectors too, a large part of the allocation still remains unused.

The most disappointing picture is in the largest fund itself. Although the single largest allocation of Tk 20,000 crore was kept in the pre-financing scheme supporting the large industry and services sector, only Tk 560 crore 93 lakh has been released so far; a further Tk 929 crore 50 lakh is awaiting release. Compared to the allocation, this rate is extremely low.

The same stagnation is seen in the food security, agriculture and employment-based schemes. From the Tk 10,000 crore fund for ensuring food security and creating employment in rural areas, only Tk 292 crore 90 lakh has been distributed. From the Tk 3,000 crore fund for building agriculture-based special economic hubs in the northern region, only Tk 48 crore 67 lakh has been released.

Of the Tk 1,000 crore fund for creating foreign employment, Tk 200 crore has been distributed. Against the Tk 500 crore allocation for the new enterprise or startup sector, only Tk 32 crore 59 lakh has been released, and Tk 5 crore is in the process of release.

In three important schemes the rate of money release is still at zero. Against the Tk 3,000 crore export diversification scheme, the Tk 1,000 crore rural economy dynamisation fund and the Tk 2,000 crore fund for the frozen shrimp and fish export sector, no money at all could be distributed as of 15 October.

Although the entire Tk 1,000 crore fund for the environmentally friendly industry and green factory sector remains undistributed, Tk 527 crore 47 lakh is in the process of release. In the Tk 2,000 crore scheme for the leather goods and footwear industry, Tk 98 crore has been released. And the entire allocation of the Tk 1,000 crore scheme for creating employment for unemployed youth is lying awaiting release.

Overall, with progress at less than a quarter of the total funds, doubts have arisen about meeting the financing targets. The purposes for which the funds were formed — agricultural production, employment and energising the rural economy — will remain confined to paper if the money does not go to the field.

It remains to be seen whether the banks' pace of loan distribution increases in the coming months. If the money in the release process reaches quickly and distribution begins in the three schemes at zero, the overall picture could change somewhat — but if the current pace is maintained, the fear is strong that a large part of the allocation will remain unused.