Agri sector, CMSME growth vital for economy

Bangladesh Bank Governor Md Mostaqur Rahman said the economy has become overly dependent on a limited range of products, services and export markets in recent years. He emphasised that greater focus on the CMSME sector and agriculture is essential to diversify the economy, boost domestic activity and generate employment.

Members of the Board of Directors of the Dhaka Chamber of Commerce and Industry (DCCI), led by its President Taskeen Ahmed, paid a courtesy call on Governor Mostaqur on Monday at the central bank’s headquarters in Motijheel.

He noted that persistently high inflation has been driven in part by elevated logistics and product management costs, stressing the need for coordinated efforts to address these challenges.

The governor also said that recent GDP growth has been below expectations, affecting the country’s ability to attract both foreign and domestic investment. He underscored the need for reforms in business and trade policies, as well as measures to reduce the cost of doing business.

During the meeting, Taskeen Ahmed said private sector credit growth has declined to 6.03%—the lowest in 22 years. He noted that the policy rate currently stands at 10%, pushing lending rates up to around 16%-17%.

He said the situation reflects a liquidity crunch in the banking system, making financing increasingly expensive and, in many cases, less accessible for businesses—particularly SMEs and manufacturing industries.

To address the issue, DCCI proposed a gradual reduction in the policy rate to lower lending costs and stimulate private investment. Alternatively, it suggested providing subsidised loans to priority sectors such as manufacturing, export-oriented industries and SMEs to support economic recovery.

Taskeen Ahmed also pointed out that the wide gap between borrowing and lending rates has resulted in a spread exceeding 5%, undermining investor confidence in the banking sector and contributing to a decline in private investment.

Emphasising the need to restore confidence in the investment climate, he stressed the importance of strengthening governance in the banking and financial sectors. He added that recent changes in loan classification policy—reducing the timeframe from nine months to three months—along with high business costs, energy shortages and weak demand, have increased pressure on businesses.

In this context, he proposed reconsidering loan rescheduling facilities for unintentional defaulters and extending the loan classification period to at least six months.

DCCI Senior Vice-President Razeev H Chowdhury, Vice-President Md Salem Sulaiman, board members and senior officials of Bangladesh Bank were also present at the meeting.