The Bangladesh Bank is preparing to launch a Tk40,000-crore refinance scheme aimed at reviving closed industrial units across Bangladesh, with the objective of restoring production capacity, safeguarding employment, and supporting export performance amid ongoing macroeconomic pressures.
According to officials familiar with the process, the central bank is finalising a policy proposal this week, which will be submitted to the Prime Minister for approval. Once endorsed, a formal circular will be issued to operationalise the scheme.
Under the proposed structure, funds will be distributed across key economic segments, with a focus on both large-scale industry and smaller enterprises, as well as agriculture. The allocation plan is as follows:
| Sector | Allocation (Tk crore) | Purpose |
|---|---|---|
| Large industries | 20,000 | Revival of major industrial units |
| CMSMEs (cottage, micro, small & medium enterprises) | 10,000 | Restart of small and medium production units |
| Agriculture sector | 10,000 | Support for production-linked rural activities |
The scheme will provide short-term working capital loans with repayment tenures ranging from one year to 18 months. The financing is intended to enable previously operational but now distressed factories to resume production and restart idle machinery.
A senior official of Bangladesh Bank stated that eligibility will be restricted to businesses affected by post-Covid disruptions, the Russia–Ukraine war, and foreign exchange volatility. Priority will be given to firms that can demonstrate confirmed orders and existing market demand.
More than 1,200 closed or partially operational factories have already been identified following data collection from banks and trade bodies. Separate categorisation has been made for enterprises with outstanding loans above Tk100 crore and those below that threshold. The central bank has also engaged with managing directors of several commercial banks to assess financing needs and determine viable cases for support.
In certain instances, defaulting borrowers may be allowed to reschedule existing loans under relaxed conditions before accessing the refinance facility.
Discussions are ongoing regarding the funding structure. While direct financing by the central bank remains under consideration, officials have acknowledged that this could increase liquidity pressure and raise inflationary risks. Banks are expected to access funds at an interest rate of around 5–6 percent, while lending rates to borrowers will be set above inflation but below the policy rate.
The initiative follows recent policy direction from Prime Minister Tarique Rahman, who emphasised strengthening the industrial sector, protecting workers’ rights, and reopening closed units.
Support measures have previously been extended to distressed industrial groups. The Beximco Group received over Tk525 crore to clear wage arrears for approximately 27,000 workers across 14 closed factories, while the Nassa Group benefited from policy support to reopen back-to-back letters of credit, safeguarding the livelihoods of an estimated 25,000 to 27,000 workers.
Economists, including those from the Centre for Policy Dialogue, have broadly welcomed the initiative but cautioned about inflationary risks and the importance of distinguishing viable firms from non-viable ones. They have also highlighted the need for strict monitoring to prevent misuse of funds, particularly in light of past stimulus experiences during the pandemic period.