Private sector credit growth plunged to 8.82% in April as an impact of countrywide shutdown imposed on March 29 to halt the spread of coronavirus, leaving all the business and economic activities to a halt. Experts cautioned that the credit disbursement situation might deteriorate further in May as the shutdown was in place for more than two months, affecting all the economic indicators of the country. The shutdown was withdrawn conditionally on May 31. The shutdown hammered almost all the business sectors including export and import along with remittance earnings. Either the business lost the financial capacity to take loans or opted to go slow until the business environment came to normalcy, said bankers. On the other hand, many of the businesses were struggling to repay existing loans, they said. In March this year, the private sector credit growth plunged to 8.86% after it dropped to 9.13% in February. In January, the private sector credit growth was 9.2%. Policy Research Institute executive director Ahsan H Mansur said , ‘Actually, businesses might have taken money from the banks only to meet up their regulator requirement and it cannot be mentioned as investment.’ ‘The growth in April this year was calculated on the last April’s outstanding credit and that’s why it has increased a bit due to the rebalancing and accounting adjustments,’ he said. ‘I do not think that any entity has taken loans in April,’ he said. Experts said that reviving the trade and investments after the pandemic would be a great challenge. The country would not be able to attain desired economic pace after the pandemic if the private sector investment situation remained unchanged, they said.
