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China now largest FDI source of Bangladesh

China has become the largest FDI (foreign direct investment) source country of Bangladesh in terms of the gross flow of $940 million for fiscal year 2022.

It has also ranked top in foreign investors with 104 investors at eight export-processing zones (EPZs). China has been the largest trading partner of Bangladesh for the past 12 consecutive years.

The trade volume between the two countries increased by 58 per cent last year showing strong resilience of bilateral trade during the Covid-19 pandemic. Chinese companies in EPZs have created employment for 129,000 people while companies outside the EPZ and Chinese building contractors continue to hiring more and more local workers.

Skills of various professionals have also been increased due to work experience with Chinese companies here and overseas. During the past decades, we have sowed the seeds of mutual benefit, nurtured shared growth through comprehensive collaboration and discussion. We are now entering a harvest season.  According to the Chinese embassy, more than 3,600 officials and technical staffers have attended the Chinese government’s seminars and training courses since 2013, mostly offline before 2020.


Bangladesh Bank creates BDT 100 billion export facilitation fund

Bangladesh Bank (BB) has created an export facilitation fund of Tk 100 billion to support export-oriented firms.

Under the fund, an exporter will be allowed to take a loan of a maximum of Tk 2.0 billion from the fund, which is a pre-finance scheme by nature, as per a BB circular issued on Sunday.

As per the circular, BB finances businesses through banks in response to their applications and exporters will have to use the fund to import raw materials, reports BSS.

Banks will avail the fund at an interest rate of 1.5 per cent from the central bank. The end users will pay 4.0 per cent to avail the fund from banks, according to a Bangladesh Bank notice.

The fund would help exporters to tackle challenges in external trade stemming from its journey towards becoming a developing nation from a least developed one.

It will also help exporters address the challenges of emancipating from the ongoing Russia-Ukraine war.

Lenders will have to repay the fund within six months. But they can extend or reduce the repayment tenure for clients.

If any exporter fails to repatriate the worth of the exported goods on time due to any unexpected situation, the central bank will extend the repayment facility for another three months on a case-to-case basis.

Clients will not be allowed to enjoy new funds from the scheme if they have overdue export bills.

Banks would be able to enjoy new funds from the scheme if they failed to repatriate their export bills on time for unforeseen reasons.

In such a situation, exporters will have to repay at least 50 per cent of their overdue payments before availing the loan facility.

Clients already enjoying loans from other funds of the central bank to import raw materials will not be allowed to take loans from the central bank’s scheme.

Members of the Bangladesh Garment Manufacturers and Exporters Association, Bangladesh Textile Mills Association, Bangladesh Knitwear Manufacturers and Exporters Association, and B and C types industries of the export processing zones (EPZs) will be eligible to avail the fund.

There are three types of companies in the EPZs, namely A, B, and C.

Joint venture companies with foreign and Bangladeshi ownerships are treated as type B and those with 100 per cent Bangladeshi ownerships type C.

Bangladesh now 35th largest economy: Visual Capitalist

Bangladesh is now the 35th largest economy in the world, according to a report titled ‘The Top Heavy Global Economy’, published by ‘Visual Capitalist’.

Bangladesh and India were the only two South Asian countries considered to be part of the 50 largest economies in this list based on International Monetary Fund (IMF) statistics, reports BSS.

Citing IMF statistics, Canadian online publication ‘Visual Capitalist’ reported this information on December 29. Countries are listed in terms of Gross Domestic Product (GDP).

As per the report, Bangladesh is the 35th largest economy in 2022 with a GDP size of US$460.8 billion. Earlier, the rank of Bangladesh was 41st.

According to the report, the neighbouring country India has moved to fifth place in the world economy. Earlier, it was in the sixth position.

With a GDP of $3.46 trillion in 2022, India has overtaken the United Kingdom (UK) to occupy fifth place.

The first, second, third and fourth places in the list are the USA, China, Japan and Germany respectively. The remaining five countries in the world’s 10 largest economies are the UK, France, Canada, Russia and Italy respectively.

According to the report, two major events happened in the world in the year 2022. First – the world’s population has crossed 8 billion. Second, the size of the world economy has crossed $100 trillion to $101.56 trillion.

Bangladesh Bank: Dollar crisis to end soon

According to Bangladesh Bank, the ongoing dollar crisis is not expected to last long as they will take measures to let the market dictate the greenback’s exchange rate.

But there is a difference between banks making profits and businesses making profits. They [banks] have to maintain many responsibilities and regulations. Encouraging sustainable banking for promoting sustainable growth became particularly crucial in this circumstance where adoption of technology became a necessity. With the evolution of technology, the entire industry has undergone a massive transformation that has changed the way financial procedures are carried out, and the way financial institutions operate.


A good compliance culture can benefit banks in several ways by covering more adequately organizational and individual risk; better shielding reputational risk; confidence among employees while performing their jobs; help to attract and retain talent and ensuring employee engagement; improved transparency which enables better decisions; enhanced relationship with regulators and other stakeholders; and enhanced valuation of the entity among investors.

Central bank announces BDT 25,000 Cr refinancing scheme for CMSME

The central bank has announced the formation of a refinance scheme of  BDT 25,000 crore for the cottage, micro, small, and medium enterprises (CMSME) sector from the bank’s own funds.

According to a circular of the Bangladesh Bank’s SME and Special Programmes Department, the three-year fund can be extended if necessary. Under the scheme, banks and financial institutions can charge a maximum of 7% interest from customers.

Besides, they will get refinancing at a 2% interest from the Bangladesh Bank, which will collect the refinancing amount along with interest from banks and financial institutions quarterly.

Banks and financial institutions have to distribute a minimum of 75% of the total loan disbursed under the scheme among cottage, micro and small entrepreneurs and a maximum of 25% can be distributed among medium entrepreneurs. Besides, at least 70% of loans can be given to the manufacturing and services sector and a maximum of 30% to the business sector. Defaulting borrowers will not get loans under this scheme.

Agriculture/food processing and agricultural machinery manufacturing industries, RMG, knitwear, design and decoration, ICT, leather and leather goods industries, light engineering and jute and jute industries will get high priority in this loan.

Also, plastics and other synthetics industry, tourism industry, home textiles, renewable energy (solar power), automobile manufacturing and repairing industry, handlooms, handicrafts, energy saving appliances (led, CFL bulbs manufacturing)/electronic appliances, construction industry/electronic material development industry, jewellery industry, toy industry, cosmetics and toiletries industry, agar industry, furniture industry and mobile/computer/television servicing will be preferred.

Apart from this, women entrepreneurs, entrepreneurs with special needs and those affected by any disaster will also get loans under this scheme on a priority basis.

In the case of loans given under this scheme, the grace period at the customer level will be a maximum of six months. Loan tenure including grace period shall not exceed five years. Banks and financial institutions have to enter into a participation agreement with the Bangladesh Bank to provide loans under this scheme.

Government banks can give loans under this scheme. However, to give loans to private and foreign banks and financial institutions, their classified loans must be less than 10% and they must have a minimum of three years of business experience.