Only 2% returnee migrants received reintegration loan

Highlights-

• FY21 budget focused on rehabilitation of returnee migrants
• Around 4.55 lakh migrants have returned home amid pandemic
• Government created Tk700 crore special fund for returned workers
• Bank distributed Tk209 crore to 9,215 returnees till 25 May, 2021
• Probashi Kallyan Bank is giving Tk1-5 lakh loan at 4% interest 
• High migration cost is still a challenge for Bangladeshi workers

In the budget for FY21, the government focused on the rehabilitation of thousands of pandemic-affected returnee migrants, but only 2% of them have received the reintegration loan from the Probashi Kallyan Bank (PKB), according to available data.

The bank distributed Tk209 crore to 9,215 returnees till 25 May this year from the government's Tk700 crore special reintegration loan fund, said Md Jahangir Hossain, general  manager of the PKB. 

Around 4.55 lakh migrant workers, most of whom lost their jobs, have returned from different countries amid the pandemic, according to the Bureau of Manpower, Employment and Training. 

In his budget speech last year, Finance Minister AHM Mustafa Kamal said the government would expand the system of distributing low interest loans among the returned expatriate workers to engage them in business and self-employment activities in the rural areas, in agriculture, agriculture-related production and services, small businesses, and small and cottage industries. 

To support this initiative, the government has created a low interest loan facility of Tk500 crore, which will be distributed through the Probashi Kallyan Bank (PKB), he said.

Apart from this loan facility, the government has also created a Tk200 crore fund from the Wage Earners' Welfare Board. Loans from this fund dedicated for the returnee migrants will also be distributed through the PKB.

The PKB is giving Tk1-5 lakh loans at 4% interest to returnee migrants. Those who receive the reintegration loans will enjoy a grace period ranging from one month to one year before they start to repay the loans. A returnee can take a maximum of Tk2 lakh as loan without any collateral.

According to a rapid study conducted by the Ovibashi Karmi Unnayan Programme (Okup) last year, around 80% of the returnee migrant workers are desirous of reintegrating in Bangladesh. But apparently the number of loan receivers is still very poor.

The chief goal of the loan distribution plan has not been met due to a lack of manpower at the PKB, communication, promotion and a very short grace period for loan repayment, says the study.

Shaheen Alam, a Malaysia returnee from Natore, told The Business Standard, "I have tried to get a Tk2 lakh loan from the PKB. But there are various conditions and complications at the bank that finally discouraged me from taking the loan." 

The PKB started disbursing loans to returnee migrants in July last year and till December of the year it disbursed Tk12 crore. The loan disbursement process picked up pace since January this year, according to the expatriates' welfare ministry.

"We hope the amount of disbursed loans will cross Tk250 crore within June this year," said Md Jahangir Hossain, general manager of the PKB. 

According to Okup's research, approximately 37% of returnee workers do not know about this loan.

The PKB general manager also admitted that manpower shortage has created a communication gap between the returnee migrants and the lender. 

High migration cost still a challenge

The finance minister noted in his budget speech last year that digitalisation of the migration management has brought about a greater dynamism and transparency in the process of workers being sent abroad and led to a reduction in migration cost.

"Moreover, reforms in the legal structure have been made to control migration costs, bring about transparency and accountability in the conduct of legal recruiting agencies, and ensure safe migration. In continuation of the reforms, the 'Overseas Employment and Migrants (Recruiting Agency Classification) Rules, 2020' has been finalised," he said. 

However, recruiting agency owners have said classifying the agencies is not possible until the whole labour market opens equally to all agencies for doing business. 

"Many recruiting agencies cannot send workers to different destinations as the authorities allow particular agencies to send workers to particular countries. If an agency cannot send workers abroad, how can it be graded good or bad?" said Shamim Ahmed Chowdhury Noman, former secretary general of the Bangladesh Association of International Recruiting Agencies (Baira).

Noman said recently the migration cost for a Saudi-bound worker has been reduced from Tk4 lakh taka to 2.6 lakh, but it will decrease further if ticket prices can be controlled.

"The air fare for Middle East-bound workers has gone up from $300 to $1,000-1,500 during the pandemic. The government should introduce a 'labour fare' to control migration costs," he said. 

The Baira leader also said medical fee, passport, police clearance and other things now cost around taka 20,000, but these things should be completed at minimum cost. 

"We have a marketing cost in the destination countries that has decreased recently in Saudi Arabia. The UAE has reopened its market conditionally for our labour, which factor plays a role in reducing the migration costs," he added.