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EDF borrowing limit raised to $15m

  • Published at 08:26 pm June 24th, 2014

The manufacturer-exporters will now be able to borrow up to US$15m from the Export Development Fund (EDF) as Bangladesh Bank has widened the limit by $3m.

The single borrower limit has been increased from $12m in response to the growing demand from the country’s exporters, said a Bangladesh Bank circular issued yesterday.

The facility will be available for manufacturer-exporters, including the members of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Bangladesh Textile Mills Association (BTMA).

At present, an authorised dealer bank may borrow from the EDF against their foreign currency financing for input procurement by their clients against export contracts or LCs.

The central bank has increased the limit in the face of growing demand and high reserve, said a senior executive of Bangladesh Bank.

The demand for the fund increased due to fall in interest rate to 1.50% in December last year from 2.50% earlier, he said.

The central bank has recently increased the allocation for the EDF by 20% to $ 1.2bn from $1bn to meet the growing demand from the country’s exporters.

The EDF loans from the central bank are payable by the banks upon receipt of exports proceeds within 180 days from the date of disbursement, extendable by the BB up to 270 days in the event of a longer period for repatriation of export proceeds, according to the central banker.