Bangladesh: Bangladesh Bank has rolled out a Tk 2,000 crore special fund to revive the country's struggling frozen fish export sector, but shrimp exporters and processors fear bureaucratic hurdles, high interest rates, and restrictive conditions could make the initiative ineffective, as happened with previous rescue efforts.
According to United News of Bangladesh, frozen shrimp exports, once a billion-dollar earner two decades ago, have collapsed to below $300 million annually. More than half of the factories registered under the Bangladesh Frozen Foods Exporters Association (BFFEA) have shut down in recent years due to power shortages and raw material crises. Export Promotion Bureau data shows that shrimp exports exceeded $400 million in fiscal year 2022-23 before sliding below $250 million in FY24. Exports recovered slightly to around $300 million in FY25 but fell again to just over $285 million in FY26, marking the lowest export volume in four years at roughly 19,000 tonnes, down from more than 25,000 tonnes in FY23.
The new three-year fund from Bangladesh Bank, announced through a circular on August 30, targets entrepreneurs looking to start new frozen food processing ventures, revive shuttered factories, or expand struggling operations. However, BFFEA President Mohammad Shahjahan Chowdhury expressed concerns that similar funds allocated in the past rarely reached genuine businesses. He noted that getting loans under such funds from scheduled banks is quite difficult, with non-genuine players often securing the 7 percent interest facility through various means, while actual fish exporters bear interest burdens of 14-15 percent. Shahjahan emphasized the need for removing bureaucratic complexities and including real businessmen in the facility to ensure its effectiveness.
Exporters drew parallels with the $240 million Bangladesh-World Bank Sustainable Coastal and Marine Fisheries Project, which ran from 2018 to 2025 with the goal of boosting shrimp production and exports. While the World Bank rated the project's outcome and performance as satisfactory, coastal shrimp farmers say the money brought little tangible change. They pointed to the sharp fall in FY26 export volumes, which industry insiders estimate at around 17,000 tonnes, as evidence that the funds were not properly utilized. Shahjahan criticized the project, stating that buildings and shrimp blocks alone will not increase production.
Concerns of possible fund misuse similarly loom over the new Bangladesh Bank facility. The circular allows loans of up to Tk 30 crore over a maximum seven-year term for new frozen food processing factories, even as existing units continue to close for want of raw materials. Bangladesh's shrimp yield stands at just around 400 kg per hectare, compared to 5,000-6,000 kg per hectare in India, Vietnam, and Thailand. Businesses argue that rescuing factories on the verge of closure should take priority over funding new ones.
BFFEA Senior Vice President Tariqul Islam Zaheer warned that offering Tk 30 crore loans for new factories could invite embezzlement attempts. He stressed the importance of ensuring that running factories stay operational and reopening those that have shut down. Zaheer also linked the sector's struggles to Bangladesh's reliance on traditional shrimp farming, noting the country's inability to export Vannamei shrimp is undercutting profitability. He mentioned that European buyers are purchasing Vannamei shrimp from India and Vietnam and expect the same price for traditionally farmed shrimp from Bangladesh, which is not profitable.
A key condition attached to the new fund requires beneficiaries to source at least 15 percent of their total electricity from solar power within two years, failing which they will be barred from this and any future central bank funds of this kind. The circular offers an additional loan of up to Tk 5 crore for those willing to install solar infrastructure, but many urban-based factory owners lack the space for solar panels and cannot afford to relocate or set up separate facilities.
Shrimp businesses are urging authorities to go beyond merely announcing funds, calling for proper utilization of the money, ensuring scheduled banks lend to genuine entrepreneurs, and using the facility to restructure the entire shrimp sector. They warn that without these measures, the fund risks following the same fate as previous financing schemes and projects that failed to meaningfully revive the frozen fish industry.