BKMEA, an association of knit garments industry owners, has asked for more time to repay the incentive loan. Last week, the organisation sent a letter to the governor of Bangladesh Bank, asking for 42 months to repay the remaining 14 instalments of the loan. The letter, signed by BKMEA president AKM Salim Osman, made several other demands besides extra time to repay the loan.
According to the letter, the factories started getting sufficient purchase orders from the beginning of the 2021-22 fiscal year. But the entrepreneurs are facing serious problems in procuring cotton, yarn, cloth, chemicals, and other raw materials for making garments. Internationally, the cost of manufacturing garments has multiplied due to the crisis of containers and skyrocketing fares, the price of yarn increasing sharply, the rising process of raw materials due to power shortages in China, etc. In July-November of the current fiscal year, knit garments exports have increased by 25.91%. Increased production costs have played a role in this growth.
It further said that foreign buyers have more trust as the entrepreneurs of the readymade garments industry continued to export garments at a loss even during times of crisis. Due to this, the export orders have increased more than before. But due to the global crisis of ships and containers, it is not possible to ship exports on time. Buyers citing various issues and are still cancelling or suspending export orders. In some cases, various conditions are being imposed, including discounts.
During the first wave of the Covid-19 pandemic, the government announced an incentive fund to pay the workers. The owner of 1500 export-oriented garments industries took a loan from that fund and paid four months’ wages to the workers. The government agreed when the owners asked for time to repay the loan instalments. At the end of that time, the owners have started repaying the loan.
BKMEA also demanded a maximum loan of 3crore dollars from the Export Development Fund (EDF) for the knitwear factories. At present, the owners of the garments industries can borrow up to a maximum of 2 crore dollars from the EDF.
The BKMEA president wants time till 31 December of this year from the Bangladesh Bank to repay the loan from EDF. At the same time, he requested that necessary instructions be given to increase the back-to-back credit limit of the garments industries by 75% due to an increase in prices of all types of raw materials.
