Economy feature

Business leaders call for single-digit lending rates

High borrowing costs squeezing investment, exports, and SME growth, they warn

Written by The Banking Post


Business leaders have urged the Bangladesh Bank (BB) to bring lending rates back to single digits, saying the current high interest rates—now exceeding 14 percent—are hurting investment, slowing industrial growth, and eroding competitiveness in both local and global markets.

The appeal came during a meeting on Thursday between BB Governor Ahsan H Mansur and a 14-member delegation representing major trade bodies, including the FBCCI, BGMEA, BKMEA, and BTMA. The discussion focused on the ongoing challenges facing businesses amid economic uncertainty and financial stress.

BTMA President Showkat Aziz Russell said the textile and garment industries were under severe pressure due to high borrowing costs and delayed payments from banks undergoing mergers.

“These delays are putting our mills at risk of becoming overdue on their own bank obligations,” he said, urging the central bank to issue clear guidelines to help mills recover their dues.

Russell also warned of unfair competition caused by struggling spinners selling yarn at below-cost prices, distorting the market. He sought Bangladesh Bank’s intervention to restore stability and requested an extension of the circular allowing import of industrial raw materials on credit—from December 2025 to December 2026—to ensure uninterrupted production and supply-chain resilience.

Echoing his concerns, FBCCI Secretary-General Md Alamgir Hossain said the current interest structure was “unsustainable,” especially for small and medium enterprises (SMEs) that typically earn profit margins of only 10 to 11 percent.

“At the present rates, many businesses cannot even break even, let alone expand or remain competitive globally,” he said, stressing that lower lending costs were essential for sustaining growth, curbing inflation, and supporting long-term investments.

The FBCCI urged the central bank to gradually reduce lending rates to single digits in the upcoming monetary policy, arguing that this would revitalize business confidence and stimulate the economy.

Business leaders also proposed extending the tenure of the borrower-restructuring committee, which expired in September, by another six months to help companies still recovering from the impacts of the pandemic, the Russia-Ukraine war, floods, and recent political unrest.

To improve access to finance, they suggested forming a monitoring committee for loans below Tk 500 million and creating a high-level coordination cell within Bangladesh Bank to resolve export-related banking issues in collaboration with the FBCCI, BGMEA, and other trade bodies.

In response, the central bank governor agreed to appoint a deputy governor to oversee export-related matters.

“This will allow us to work more closely with Bangladesh Bank and resolve critical issues more efficiently,” Hossain said after the meeting.


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