Bangladesh is going to take loan of 2.2 billion RMB (about 36.96 billion BDT) from the Asian Infrastructure Investment Bank (AIIB) to strengthen the Cottage, Micro, Small and Medium Enterprises sector. It is hoped this funding will help grow businesses, create jobs and strengthen the overall impact of small businesses on the economy. According to a recent cost analysis by the central bank, borrowing in Chinese Yuan is the cheapest option, costing at 2.78 percent interest. The loan has a repayment term of 20 years, allowing the loan to be paid out over a long term to subsidize small businesses.
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While this move offers immediate financial advantages, economists suggest that Bangladesh should also consider the potential risks associated with long-term foreign currency dependence, including possible geopolitical and economic fluctuations. This move follows UP government’s vision of aiding small business as it realized their important role in fostering economic growth as well as employment generation in the state.
Source: Business Inspection BD
