Joint venture apparel factories to get export development loans
Export-oriented apparel units are due to be able to borrow from the fund to import raw materials
Apparel industries under local-foreign joint ventures in the export processing zones will qualify for loans from the export development fund.
The Foreign Exchange Policy Department of the Bangladesh Bank issued a circular in this regard on Monday.
Previously, only C-type garment factories – which are in export processing zones and completely owned by homegrown investors – were eligible for loans from the export development fund. Now, local-foreign joint ventures – those that fall in the B category – have joined the borrowing rally.
Keep updated, follow The Business Standard's Google news channel
In contrast, foreign-owned A-type factories cannot avail the loan.
Export-oriented apparel units will be able to borrow from the fund to import raw materials. A factory can borrow a maximum of $15 million, while the ceiling for Bangladesh Garment Manufacturers and Exporters Association (BGMEA) members is $20 million.
To cushion the pandemic's fallout, the government has also relaxed the lending conditions for garment makers and textile manufacturers. Factories with BGMEA or Bangladesh Textile Mills Association (BTMA) membership can borrow from the funds regardless of their location while the single borrower exposure limit for them is $30 million.
The limit for Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) members has been raised to $20 while the export development fund has been increased to $5 billion.
Apart from ready-made garments, the export-oriented plastic, leather and ceramic industries can also get loans from the fund. A plastic product manufacturer can borrow a maximum of $1 million.
Meanwhile, there are no ceilings for leather and ceramic manufacturers as they get the loans based on their export performance and import demand.
In another circular Monday, the central bank said the deadline for the late import payment of empty LPG cylinders was extended to 360 days. The circular said similar facilities are being provided for the import of capital machinery and parts.
From now on, industries will get the same facilities for importing empty LPG cylinders, it added.
