Companies in these sectors import raw materials like cotton, synthetic fibre and dyeing chemicals.
Bangladesh textile millers recently urged the central bank to extend the repayment tenure of loans from the Export Development Fund (EDF) up to 270 days as they often do not receive timely payment from exporters. They also sought continuation of foreign currency support to export-oriented manufacturing sectors, especially textile and apparel exporters.
The repayment tenure is generally 180 days now and an additional 90 days are allowed subject to approval by the Bangladesh Bank.
Many banks allegedly are unwilling to offer additional time.
In a few cases, the mills cannot pay back the EDF loan on time as they do not get timely payment from exporters, Bangladesh Textile Mills Association (BTMA) president Mohammad Ali Khokon told a press briefing.
The current limit of the EDF—set up with only $300 million in 1988 and with a corpus of $7 billion now—for textile millers is $25 million.
The export-oriented sectors, especially the members of BTMA, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), are the beneficiaries of the special loan facility.
“The local textile and RMG sector is passing through an unusual situation now due to the high prices of raw materials, energy and dollar amid the Russia-Ukraine war and a declining trend in remittance inflow,” the BTMA president was quoted as saying by Bangladeshi media reports.
Readymade garment exporters pay for yarn and fabric using US dollar after receiving the export proceeds and textile millers repay the EDF loan accordingly, Khokon added.
Fibre2Fashion News Desk (DS)