Bangladesh's Tk20,000 Crore Factory Revival Fund Has Disbursed Just Tk50 Crore So Far

Four months after Bangladesh Bank launched a Tk20,000 crore fund meant to breathe life back into closed and underutilized factories, the scheme has disbursed just Tk50 crore, to three borrowers, while 25 applicants together asking for Tk750 crore wait for their loans to clear. Business leaders say the bottleneck is not demand, it is bureaucracy, and point squarely at how long it takes participating banks to even convene the board meetings needed to approve an application.

What the Fund Was Supposed to Do

When Bangladesh Bank unveiled the facility in June, the pitch was straightforward. Many large factories and export-oriented businesses still have functional machinery but cannot run at full capacity because they lack the working capital to pay workers, buy raw materials, settle utility bills or fulfil export orders that are otherwise sitting on the table. Under the scheme, participating banks borrow from Bangladesh Bank at 4 percent annually, with no interest due for the first six months, and are capped at charging borrowers no more than 7 percent with no additional fees. Loans run for up to one year, renewable for businesses that show signs of recovery, no single company or business group can draw more than Tk200 crore, and export-oriented firms get priority. The fund operates on a revolving three year basis, with wages required to go directly into workers' bank accounts and quarterly factory inspections built into the design.

The Warnings That Came True

The scheme was barely a week old before economists and business groups started warning that its own eligibility rules might defeat its purpose. The central requirement that borrowers show a clean Credit Information Bureau record drew particular criticism. "A factory that shut down because of a liquidity crisis will naturally face loan repayment difficulties," BKMEA president Mohammad Hatem argued at the time, pointing out that the very firms the fund was designed to rescue were, almost by definition, the ones most likely to have a blemished credit history. A senior Bangladesh Bank official acknowledged the tension directly, conceding that "many distressed factories cannot meet conventional lending criteria." Business groups also flagged the one year repayment window as unrealistic, arguing that reviving a shuttered factory, rebuilding supply chains, restoring buyer confidence and rehiring staff all take longer than twelve months, and urged the central bank to judge applicants on their revival potential and capital injection capacity rather than on historical credit records alone.

Why Applications Are Still Stalling

Four months on, those warnings look less like caution and more like a preview. Business leaders now say the practical choke point is procedural: bank board meetings, where loan applications under the scheme must be approved, are in some cases taking up to a month to convene. Industry representatives have asked participating banks to hold weekly or as-needed board sessions instead, specifically to clear the backlog of applications under this fund. Hatem, the BKMEA president, put it plainly this week: "Many are unable to apply due to a lack of cooperation from banks." Beyond the scheduling problem, applicants also describe banks reluctant to accept applications in the first place and demands for what businesses consider excessive documentation, concerns that echo almost exactly the objections raised when the fund first launched.

Metric	Figure
Total fund size	Tk20,000 crore
Applications received	25 customers, Tk750 crore requested
Loans actually disbursed	3 customers, Tk50 crore
Share of fund disbursed so far	About 0.25%
Maximum borrower rate allowed	7% annually
Maximum per company or group	Tk200 crore

A Gap Between Design and Delivery

The disbursement numbers underline just how wide the gap has grown between the fund's design and its delivery. Tk50 crore against a Tk20,000 crore envelope is a take-up rate of roughly one quarter of one percent, four months into a scheme meant to be revolving and reasonably fast-moving. Even the Tk750 crore in total applications represents under 4 percent of the available pool, suggesting that the clean credit record requirement and the broader caution it reflects may indeed be screening out exactly the kind of distressed, cash-starved businesses the fund was built to reach, just as critics warned in June. The businesses that do qualify cleanly under conventional lending criteria, meanwhile, are arguably not the ones in most urgent need of a rescue fund in the first place.

This is not the only large refinance scheme Bangladesh Bank is currently running through the same reluctant pipeline of bank board approvals. The central bank's separate Export Facilitation Pre-finance Fund was expanded from Tk5,000 crore to Tk7,000 crore just this month, part of more than Tk10,000 crore in refinance schemes now sitting across export, green and digital categories. Whether that expansion moves faster than the factory revival fund has, or runs into the same board-meeting bottleneck, will be an early test of whether banks have adjusted their internal processes at all since the complaints about this fund first surfaced.

What Would Actually Unstick It

The fixes business groups are asking for now are largely the same ones proposed back in June: faster, more frequent board sessions dedicated to clearing the backlog, a more flexible assessment framework that weighs a factory's revival potential and an owner's capacity to inject fresh capital rather than leaning solely on a credit record that a liquidity crisis will have already damaged, and simplified documentation requirements that do not treat every applicant as a presumptive risk. None of that requires new legislation or a redesign of the fund itself, which is part of why the continued stall four months in reads less as an intractable problem and more as a test of whether Bangladesh Bank is willing to lean on participating banks to actually move faster. For now, with Tk19,950 crore of the facility still sitting unused, the factories it was meant to revive are still waiting.