Diversifying investment

Recently, in a two-day international conference jointly organised by Financial Inclusion Network, Bangladesh and the Institute for Inclusive Finance and Development, it was revealed that around 90 percent of loans and advances are based in Dhaka and Chattogram districts. This along with the fact that most of these are received by a few corporate businessmen can be a deterrent for social development.   
Economically, geographical diversification is the practice of diversifying an investment portfolio across different regions so as to reduce the overall risk and improve returns on the portfolio. Most large multinational corporations across the world have a high degree of geographical diversification. This enables them to reduce expenses by setting up plants in low-cost regions and may have a positive impact on a corporation’s revenues. Firms can lower their risk exposure to political and economic changes and “forces majeures” by locating particular departments and/or resources in different parts of the world.
The scenario in our country is quite the opposite. And it’s not helpful for balanced and equitable development. Our government should formulate a policy of inclusive development for diversification of investment based on geographic locations.

Md Zillur Rahman, by email