They had to start paying the installments of the easy loans in the amount of Tk 10,500 crore that they took from this month.
Export-oriented garment manufacturers were granted another six-month extension to repay loans taken under the government’s stimulus package.
On the eve of Bangladesh embarking on a nationwide shutdown on March 26 last year to curb the spread of the coronavirus, the government announced a special Tk 5 billion package to pay the salaries and allowances of workers in export-oriented industries for three months starting in April.
As the fund was later found to be inadequate, the government released another Rs 2,500 crore from the rescue package implemented for large industries affected by the pandemic. Then, in July, the government made another Tk 3 billion available to pay the monthly wages and salaries.
Garment exporters had to start paying the installments of the easy loans worth Tk 10.5 billion they took from this month.
But the Bangladesh Garment Manufacturers and Exporters Association was pushing for an extension of the deadline from two to five years, with a one-year grace period, to repay the initial Tk Rs 5,000 million stimulus.
Now they will have to settle for a six-month extension.
According to the letter sent by the Finance Ministry on February 22 to the Bangladesh Bank, the executioner of the government aid packages, the payment of the loan installments will start from September 1 and the borrowers will have to pay in 18 installments. .
There will be no grace period and the other terms and conditions will remain unchanged.
“We are always grateful to the Prime Minister for extending the moratorium period for six months and standing by our side, especially during these difficult times,” Rubana Huq, president of BGMEA, told the Dhaka Tribune.
Huq is hopeful that the situation will change with the launch of Covid-19 inoculation in much of the Western world.
“The sector will be in our recovery phase then and exporters will be able to start repaying.”
The country’s garment sector must hold out for the next six months, said Huq, outgoing chairman of BGMEA.
The extension will be a great support for exporters, especially small and medium-sized factories, which are suffering from a cash shortage, said Fazlee Shamim Ehsan, director of the Bangladesh Fabric Manufacturers and Exporters Association.
“We are very grateful to Prime Minister Sheikh Hasina because she offered a package for the sector immediately after the outbreak of the Covid-19 pandemic, which helped us a lot to turn things around.”
Now, for the sake of workers and the industry, he has considered the demands of factory owners at a time when many are struggling to survive.
This extension will provide a cushion against funding shortages, Ehsan added.