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Buying Raw Hide

Tannery sector demands Tk 600cr fresh bank loans

Published : Tuesday, 30 June, 2020 at 12:00 AM  Count : 253

The tannery sector is in worst shape marred by huge loan irregularities and mostly by default loans. A total Tk 3500 crore default loan in the tannery sector shows the worst scenario and about 80 percent loan in this sector becomes faulty every year.
A report by Bangladesh Bank highlights only Tk 700 crore loans are regular in this sector while only 5 per cent of regular loan is being repaid in time. The sources said all the 155 listed tannery owners in the country are in debt.
In this background tannery owners are proposing a new loan of Tk 600 crore to buy raw hide and skin during the upcoming Eid-ul-Azha.
Sources said the Industry Ministry arranged a task force meeting with tannery owners Sunday    in which Industries Minister Nurul Majid Mahmud Humayun and other senior officials attended.
At the meeting, tannery owners proposed to reschedule defaulted loans of around Tk 3,500 crore which spilled up in three years from September 2017-2020 as part of the policy support for the development of leather sector. Moreover with one year grace period, they have sought the opportunity to repay the loans in interest-free installments for next 16 years.
At a meeting of the Task Force on Leather Development held on June 22, with Prime Minister's advisor on private sector investment Salman F Rahman, leather sector leaders have sought his help and urged the concerned parties to help overcome the existing sectoral crisis.
Salman F Rahman said the leather industry is in crisis. Without credit and policy support to the industry now, it will not be able to turn around in 10 years. The sector must be kept alive in the interest of the country's economy.
The sources said that the industry leaders have also demand new cash loan of Tk 600 crore for buying raw hide and suggested that every tannery owner's leathers may be considered as mortgage assets.
Bangladesh Bank says, 71 organizations are currently getting loans to buy raw hide and these entities owe Tk 1137 crore to various banks. Of these, irregular loans stand at Tk 85 crore.
President of Bangladesh Tanner Association, Shahin Ahmed, said that "Those who are getting loans are genuine leather traders."
In the nineties, 25 to 30 industries became sick as they did not have solvency to import finished leather; as a result, they could not return the loan, he added.
 "We want the sector to prosper again." In leather management, everyone deserves a loan worthy of demand. Besides, the bank also repaid his loan. If the proposals of tannery entrepreneurs are considered, it will be good for all banks and entrepreneurs. Otherwise, the industry will not be able to turn around, he said.










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