Interest relief for Japanese investors
Bangladesh Bank yesterday lowered the interest rate of which Japanese investors can avail funds from the foreign direct investment promotion project, looking to draw more financing from the East Asian island country.
To any extent further, Japanese investors, be it individually or through joint ventures with locals, will be entitled to 5 per cent interest rate instead of the prior 7 %, according to a central bank notice. Furthermore, local exporters whose gross annual shipments to Japan total $1 lakh and above will be allowed to get loans from the project, which is designed to provide financing to financial intermediaries.
The project is actually a Tk 550 crore worth fund formed in 2017 by the federal government with the help of Japan International Cooperation Agency (Jica) to give momentum to the inflow of FDI in the united states.
Businesses have up to now taken around Tk 140 crore from the fund in the sort of refinance and pre-finance.
Under the refinance scheme, banks hand out loans to businesses and the banking regulator reimburses the lending company afterwards. In case of pre-finance, lenders first avail the fund from the central bank scheme before disbursing the associated loans to borrowers. Both term loan and working capital are now provided to entrepreneurs. The loans have a repayment tenure of five to 10 years. A grace amount of a maximum of one to two years is allowed.
The tenure of the project is up to 2025, and it will become a revolving fund. Revolving funds are formed for specific purposes with the proviso that repayments to the fund will be utilized again for all those purposes.
