BGMEA, BKMEA seek six more months for loan repayment
Apparel makers and knitwear manufacturers say they need the government support to survive the pandemic-led crises
Two apparel exporters' associations have appealed for extension of the current moratorium on loan repayment by six more months.
In a joint letter to the finance minister on 20 June, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) requested not to classify their bank loans in the next six months if they fail to pay the installments.
Following the coronavirus outbreak in Bangladesh, the government in 2020 extended the loan moratorium for apparel makers until December last year. The repayment deadline later extended twice to 30 June 2021.
Keep updated, follow The Business Standard's Google news channel
The joint letter to the finance minister said, loan repayments on time have become difficult for the entrepreneurs since businesses are yet to return to normal and the liquidity crisis intensifies.
The letter signed by BGMEA President Faruque Hassan and BKMEA President AKM Salim Osman highlighted the ongoing issues in the sector.
It said the government and the entrepreneurs hoped that the coronavirus pandemic would subside and the readymade garment sector would revive. But as the prevalence of Covid-19 does not decrease, the garment entrepreneurs are going through a tough time.
Mentioning the price hikes of apparel raw materials, the letter said they now have to pay $4.5 for raw materials while the previous cost was just $2.5. But, the actual price of clothing has not increased, rather fell in some cases. Entrepreneurs have been forced to continue exporting with losses just to survive.
The two associations said their liquidity crisis is escalating due to non-receipt of timely payments from foreign buyers and continuing production with losses. Entrepreneurs are also deeply concerned about the future of the industry, the investment situation and other operations including worker payments.
The letter said, the annual bank-closing [finalising the calculations for the current fiscal year] is slated for this June as there will be Eid-ul-Azha celebration in July. Factory owners will need a lot of cash to pay the workers' salaries and bonuses.
Contacted, BKMEA Vice-President Mohammad Hatem told The Business Standard, "We need the facility from the government just to survive."
