Eligibility For Foreign Loan

How to Obtain Eligibility for a Foreign Loan in Bangladesh

Overview

Many private sector companies in Bangladesh seek foreign loans due to their lower interest rates compared to domestic financing options. According to Bangladesh Bank, foreign borrowing is a common practice for businesses requiring capital beyond the limited resources of local banks.

However, before securing a foreign loan, companies must obtain approval from the Scrutiny Committee of the Bangladesh Investment Development Authority (BIDA).

Documents Required for Foreign Loan Approval

✅ Prescribed Application Form – Duly filled as per BIDA requirements
✅ Board Resolution – Approval for obtaining a foreign loan
✅ BIDA Registration – Latest registration documents
✅ Loan Agreement – Between the borrowing company and the lender
✅ Sponsor/Director Credentials – Background and financial standing
✅ CIB Inquiry Forms (1 & 2) – Filled and signed by sponsors/directors
✅ CIB Certificate – Of the company and its sponsors
✅ Track Record – Of past foreign loans or deferred payments (if any)
✅ Audited Balance Sheet – For the previous financial year
✅ Utilization Certificate – From the nominated bank
✅ Credit Rating Report – Latest credit rating of the company
✅ Financial Analysis Report – Up-to-date company financials
✅ Feasibility Report – Details of the proposed project
✅ Forms X, XII, and XV – From RJSC & F (Registrar of Joint Stock Companies)
✅ Certificate of Incorporation – Company registration proof
✅ Memorandum & Articles of Association – Legal framework of the company

Approval Process

📌 Step 1: Submit the prescribed application form along with the required supporting documents to BIDA.

📌 Step 2: The proposal is reviewed by the Scrutiny Committee, which is governed by the Governor of Bangladesh Bank.

📌 Step 3: Based on the Committee’s recommendation, the applicant:

• Pays the nominated fee into the designated bank.
• Receives a money receipt from BIDA.

📌 Step 4: Upon successful review, BIDA issues the final approval letter for the foreign loan.

Why Seek Foreign Loans?

💰 Lower Interest Rates – Compared to domestic loans.
📈 Higher Capital Availability – Supports large-scale investments.
⚡ Flexibility in Repayment – Terms are often more favorable.
📊 Global Financing Opportunities – Expands business access to international markets.