The homeowners took out loans of Tk 105 billion at a minimal rate of interest from the federal government fund to pay employee salaries and allowances for the months of April to July.
The scheme requires factories to clear the money owed in 18 equal instalments over two years, with a grace interval of six months. However now the homeowners have utilized for 5 years’ time to pay again the loans.
Rubana Huq, president of garment exporters’ foyer Bangladesh Garment Producers and Exporters Affiliation, wrote to Commerce Minister Tipu Munshi concerning the demand on Sept 9.
The BGMEA chief solicited ‘cooperation’ and ‘compassion’ from the commerce minister, who himself is a former president of the foyer.
Picture: Asif Mahmud Ove (File Picture)
“The garment sector is passing by a tricky time because of the COVID-19 pandemic. That’s the reason we requested for 5 years’ time to repay the loans,” BGMEA Secretary Abdur Razzak instructed bdnews24.com.
However Prime Minister Sheikh Hasina can have the ultimate say on the matter, in line with Finance Minister AHM Mustafa Kamal.
The BGMEA’s letter highlighted the travails of the business throughout the pandemic and stated it should take eight to 9 months to obtain the fee for latest and previous work orders positioned by the consumers. Due to this fact, it is going to be ‘almost not possible’ to repay the loan throughout the stipulated time, it argued.
The federal government introduced 20 incentive packages worth Tk 1.1 trillion till now, to fight the COVID-19 pandemic and reverse the financial slowdown it brought on.
The primary stimulus of Tk 50 billion was given to the export-oriented garment sector to pay their staff throughout the disaster. The package deal for the months of April to June was introduced on Apr 1 because the homeowners took out the loan with a 2 % service cost from industrial banks and paid their employees.
The fund was empty earlier than the repayments have been made for June, prompting the federal government so as to add one other Tk 25 billion to it.
However the BGMEA and BKMEA appealed for extra monetary assist from the federal government to pay their staff from July to September.
The federal government organized a loan for the homeowners to clear the salaries for July from the Tk 300 billion fund created for the industries and providers sector. It later injected one other Tk 30 billion into the fund.
On Jul 24, Bangladesh Bank wrote to the chief executives of banks to offer loans to the homeowners to pay their staff. The homeowners might take out a last loan for paying the salaries due in July, the letter stated. Solely those that took out loans to pay June’s salaries might apply for a loan underneath the programme.
However the rate of interest was set at 9 %, together with a authorities subsidy of 4.5 %, with the debtors chargeable for paying off the remaining.
On Aug 20, the garment manufacturing unit homeowners as soon as once more sought a loan to pay the employees’ salaries for August, September and October. However this time, the federal government didn’t reply.
“Like BGMEA, we imagine that our demand is official,” Mohammad Hatem, vp of BKMEA, instructed bdnews24.com concerning the enchantment for a time extension to repay loans.
The consumers started to cancel or defer the work orders when the coronavirus pandemic upended the attire market in the US and Europe. Additionally, Bangladesh imposed a lockdown in a bid to curb the unfold of the coronavirus within the nation, shutting all factories on Mar 26.
In accordance with the Export Promotion Bureau, garment exports slumped to $360 million in April because of the pandemic. It subsequently climbed to $1.23 billion in May after which $2.25 billion in June. Garment exports surged to $3.24 billion in July, the primary month of the fiscal yr, and $2.46 billion in August.
The readymade garment sector noticed no progress in July and August, however the revenue nonetheless surpassed the goal by 2 %.