The export-oriented apparel makers got another extension of six months to repay the loans taken under the government’s stimulus package.
On the eve of Bangladesh embarking on a countrywide shutdown on March 26 last year to slow the spread of coronavirus, the government announced a Tk 5,000-crore special package to pay the wages and allowances of export-oriented industries' workers for three months starting from April.
As the fund was later found to be inadequate, the government released another Tk 2,500 crore from the bailout package rolled out for the large industries affected by the pandemic. Then in July, the government made available another Tk 3,000 crore to pay the wages and salaries for the month.
The apparel exporters were due to start paying the instalments on the easy loans amounting to Tk 10,500 crore they took from this month.
But the Bangladesh Garment Manufacturers and Exporters Association was pushing for a deadline extension of two to five years, with a one-year grace period, for repaying the initial Tk 5,000 crore stimulus.
They will now have to settle for an extension of six months.
As per the letter sent by the finance ministry on February 22 to the Bangladesh Bank, the executioner of the government’s relief packages, the repayment of loan instalments will start from September 1 and the borrowers will have to repay in 18 instalments.
There will be no grace period and the other terms and conditions will remain unchanged.
“We remain ever grateful to the Prime Minister for extending the moratorium period by six months and standing by our side especially during these troubled times,” Rubana Huq, president of the BGMEA, told Dhaka Tribune.
Huq is hopeful that the situation will turn around with the rollout of Covid-19 inoculation in much of the Western world.
“The sector will be in our recovery phase then and the exporters will be able to start repayment.”
The country’s garment sector needs to ride out the next six months, said Huq, the outgoing BGMEA president.
The extension will be a great support for the exporters especially the small and medium factories, which are suffering from a cash shortage, said Fazlee Shamim Ehsan, a director of the Bangladesh Knitwear Manufacturers and Exporters Association.
“We are very grateful to Prime Minister Sheikh Hasina as she offered a package for the sector immediately after the outbreak of Covid-19 pandemic, which helped us a lot in turning things around.”
Now, for the sake of workers as well as the sector she has considered the factory owners’ demands at a time when many are struggling to survive.
This extension will give a cushion against the fund shortage, Ehsan added.
