BKMEA demands Bangladesh Bank raise EDF loan limit to $25m for members

Staff Correspondent | Published: 23:16, Jan 13,2020


The Bangladesh Knitwear Manufacturers and Exporters Association has demanded that the Bangladesh Bank raise to $25 million for its members the limit on foreign currency loan amount from the central bank’s export development fund.

In a letter to BB governor Fazle Kabir on January 5, the BKMEA said that the central bank in May, 2018 in a circular increased the EDF loan limit for the members of Bangladesh Garment Manufacturers and Exporters Association and Bangladesh Textiles Mills Association to $25 million from $20 million.

But the knitwear exporters are not getting the extended amount of loans as the BKMEA is not included in the circular.

The BKMEA letter signed by its acting president Mohammad Hatem said that the members of the trade body were not able to use their optimum investment capacity due to an absence of the extended loan facility.

He demanded that the BB issue a fresh circular on the increased limit on the EDF loans, including the name of BKMEA as the knitwear sector contributed 41.66 per cent to the country’s total export.

Hatem on Sunday told New Age that the extended limit on EDF should be applicable to the BKMEA members as the export earnings of knitwear sector was not less than the earnings of woven sector.

‘We demand the same facility from the EDF the BGMEA and the BTMA are enjoying,’ he said.

The EDF was launched in 1989 to facilitate access to financing in foreign exchange for input procurements by manufacturer-exporters, and the current size of the fund is $3.5 billion.

Under the existing provision, the EDF financing is allowed for input procurements against back-to-back import letters of credit or inland back-to-back LCs in foreign exchange by manufactures producing final output for direct export.

The EDF loans from the central bank are payable by the banks upon receipt of export proceeds within 180 days from the date of disbursement.

The timeframe is extendable by the BB up to 270 days in case of a longer period taken for repatriation of export proceeds.

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