Dhaka, Jan. 26 -- Margin loans should be short term. Investors should make an exit from investments made with borrowed cash quickly even if there is a loss. Otherwise, losses may mount along with repayment burden, dragging both investors and lenders into an abyss recovery from which seems impossible.

Managing Director of IDLC Securities Md. Saifuddin shared its strategy regarding margin loans in an interview with The FE.

At present, the yearly interest rate against margin loans is 15-17 per cent. The return of the equity market is lower than the interest rate. Hence, securing profits from investments to pay back loans is a challenge that intensifies as the repayment period is extended.

Market return was lower than interest rate even wh...