The ERF is a program under the Export Competitiveness for Jobs (EC4J) project, under the Ministry of Commerce and funded by the World Bank Group
The Ministry of Commerce on Wednesday launched a new "Export Readiness Fund" to help four promising sectors to boost their exports.
The ERF is a program under the Export Competitiveness for Jobs (EC4J) project, under the Ministry of Commerce and funded by the World Bank Group, aimed to bring diversification in the country's export basket.
Commerce Secretary Md Jafar Uddin inaugurated the program virtually in an event titled "Export Readiness Fund: Call for Window 2 & Window 3", in which Project Director of EC4J Obaidul Azam and Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB) President Md Saiful Islam were present, among others.
Md Jafar Uddin said that Bangladesh was still heavily dependent on the readymade garment (RMG) sector for the bulk of its export earnings.
“I am very much optimistic that the Window 2 and Window 3 of the Export Readiness Fund under the EC4J will boost export, especially focusing on the four mentioned sectors,” he added.
Obaidul Azam said that the fund would help businesses to identify constraints, upgrade product quality, and diversify products for better access to export markets.
“The purpose of the fund is to help small and medium enterprises (SMEs), who are export-oriented, to mobilize investment in their production plant, equipment, and services for target industries,” Obaidul Azam said.
LFMEAB President Md Saiful Islam said that their total exports had reduced by 50% in the April-August period this year.
"I am happy to see Window 2 and 3 of the fund for our capacity building during this pandemic,” he added.
According to Export Promotion Bureau (EPB) data, the RMG sector solely brought more than 80% of Bangladesh's export earnings for a long time, while the other sectors’ contributions to the exports were only 20%.
Besides, the export markets of Bangladesh were also dependent on the US and EU, covering about 74% of the total exports.
The ERF was launched in January earlier in the year and provides funding and guidance to businesses to meet environmental, social, and quality (ESQ) compliance standards so they can compete in global export markets.
The newly declared fund will be available until March 2023.
Two types of funding available
The newly launched funds include Window 2 and Window 3.
Window 2 will provide smaller grants that cover business and technical services to meet ESQ standards. The maximum grant size is $40,000, with 40% minimum as recipient’s contribution.
Window 3 provides grants that cover both service and fixed asset expenditures to meet ESQ standards. The maximum grant size is $200,000, with 50% minimum as recipient’s contribution.
The ERF Window 1 is expected to fund ESQ assessments for 400 companies, while it has already signed agreements with 165 companies and is in the process of signing with 183 more companies.