How to obtain eligibility for Foreign Loan in Bangladesh

It is common practice for a private sector company to secure funds from external sources such as foreign loans. According to a study by Bangladesh Bank, private sector companies resort to foreign loans due to their low interest rates and the low capital base of domestic banks.

Before borrowing from a foreign bank, a private company in Bangladesh needs approval from the Scrutiny Committee of the Board of Investment.

Documents required

1. Duly filled-in prescribed application form
2. Board's resolution for the proposed foreign loan
3. Latest registration from BIDA
4. Loan agreement between the parties
5. Credentials of the sponsors or directors
6. Duly filled-in CIB Inquiry Form 1 & 2, and an undertaking from its sponsors or directors
7. CIB certificate of the company and its sponsors
8. Track record of past foreign loans/deferred payment (if available)
9. Audited balance sheet of the previous year
10. Utilization certificate from the nominated bank
11. Up-to-date credit rating report of the company
12. Up-to-date financial analysis
13. Up-to-date feasibility report of the proposed project
14. Form-X, Form-XII and Form-XV from RJSC&F
15. Certificate of incorporation of commencement
16. Memorandum & Articles of Association

Process

The applicant is required to submit the prescribed application form together with the above supporting documents. For final approval, a fully documented proposal needs to be presented before the Scrutiny Committee, governed by the Governor of Bangladesh Bank. The applicant receives clearance based on the Committee's recommendation, pays the nominated fee into the designated bank, and receives a money receipt from BIDA. A letter is then issued by BIDA once the applicant receives approval.

Time limit

Estimated processing time for approval of a foreign loan is thirty (30) days.

Government fees

Ranges from BDT 5,000 to BDT 1 lac, depending on the amount of the loan.