BGMEA seeks financial facilities to cushion corona fallout
As export uncertainty and financial crisis is looking large, Bangladesh Garment Exporters Association (BGMEA) has sought interest-free loans for textile and readymade garment sector for the next six months with a three-year repayment facility as Coronavirus is hitting the industry hard.
It is important for the clothing sector so that the factories can meet their overhead expenses, Including payment of workers' wages, bonus and utility bills, the apex body of the country's readymade sector said.
BGMEA president Rubana Huq in a recent letter to Prime Minister's Principal Secretary Ahmad Kaikaus, placed several demands, including interest-free loan facility and suspension of rules and regulations related to export proceeds realisation for six months. Such measures are required as a support to the ailing business sector, she said.
The BGMEA in the letter sent on March 15 to the PM office said Bangladesh Bank should start re-financing commercial banks to provide interest-free loans to apparel exporters with a six-month grace period and payable in equal installments in the next 30 months.
Commercial banks should also waive interest on existing loans for six months and should not charge any special interest on payable installments of existing term-loan or advances in the next six months, it said.
The trade body also demanded an extension of tenure of loan classification to180 days. It has also recommended the simplification of procedures of receiving foreign currency loans.
The apex body said banks should not create forced loans in case of failure by a party of timely payment of back to back letter of credits. The time for repayment should also be extended. The government should also suspend the rules and regulations related to export proceeds realisation for six months.
The BGMEA letter has further sought extension of repayment tenure for loans against PC and EDF for upto three months. The tenure of EDF should be extended to 270 days down from 180 days at the moment if the back-to-back LCs were opened against EDF.
Apparel exporters should also be given additional 90 days for submission of bill of entry and EXP reporting. The BGMEA has also sought Tk 5 against each US dollar as retention value during April, 2020 to December 2020 to keep the local exports competitive with its global competitors.
The government will require around Tk 3,000 crore for the purpose, the letter said. She made the plea for urgent consideration of these demands to keep the sector vibrant and ensure livelihoods of millions of workers entering into a crucial phase of uncertainty, Rubana said.
She said that global buyers are cancelling export orders or delaying ongoing shipments and reducing the volume of future orders as the impact of the epidemic.
Bangladesh export has so far reported around 25.90 per cent decline this year and it is going to be very difficult for the industry to sustain the losses, she said.