9 sectors hold 70pc bad loans
Around 70 per cent of default loans in the banking sector is concentrated in nine sectors of the economy as many borrowers are finding it difficult to pay instalments for the dragging economic slowdown while willful defaulters are also a major factor. The nine sectors are ship-building and ship-breaking, small and medium enterprises, leather, trade, textile, readymade garment, transport, credit card, and non-bank financial institutions (NBFIs). Non-performing loans in the sectors stood at Tk 71,030 crore in December out of a total default loan of Tk 101,935 crore, according to the Financial Stability Report released by the Bangladesh Bank on Monday. The business slowdown stemming from the coronavirus pandemic along with the ongoing economic crisis has hurt the borrowers in the nine sectors. In addition, banks also gave out loans without following corporate governance, pushing up NPLs. As of December, banks disbursed funds to the tune of Tk 20,236 crore to the ship-building and ship-breaking industry. Of the sum, 18.87 per cent has turned bad. Emranul Huq, managing director of Dhaka Bank, says willful defaulters have mainly brought woes for the ship-breaking sector, the second-largest in the world after India in 2022.
Prices of most commodities drop in global market – Says World Bank
Most commodity prices declined globally in September, according to the World Bank, extending some relief to the import-dependent countries under pressure for higher import bills and runaway inflation. Energy prices fell 8.1 per cent in September, led by a decrease in natural gas and crude oil prices, the World Bank’s Pink Sheet reported on October 10. The Pink Sheet is a monthly report that monitors commodity price movements. Natural gas prices were down 15.6 per cent and crude oil dropped 8.1 per cent last month. Non-energy prices fell 1.7 per cent. Agricultural prices eased 0.8 per cent in September. Food prices changed little as a group as a 6.9 per cent increase in grains was balanced by a 3.8 per cent fall in edible oils, the WB said. Beverage and raw material prices declined 0.5 per cent and 4.8 per cent, respectively.
App-based economy expands, leaving workers unprotected
The growing popularity of on-demand online booking for a wide range of services – from ride sharing to repairing tasks or house help – or e-commerce orders is causing a mushrooming growth of relevant online platforms in the country. Also, more and more app-based gig workers, mostly the youth, are serving them as independent contractors for a living wage through freelancing, instead of waiting for the desired status as an employee. In 2021, Bangladesh’s gig workforce grew to around three lakh location-based gig workers, while around five lakh cloud workers made the country the second-largest online outsourcing destination. However, the platform economy is expanding without adequate protection of the gig workers’ interests, reveals a study by Oxford Internet Institute’s Fairwork project in partnership with local social enterprise iSocial and research firm DataSense.