Exporters to get stimulus from BB refinance scheme

Apparel exporters will get money from the Tk5,000 crore fund under a refinance scheme of the Bangladesh Bank, officials with knowledge of the matter said yesterday.

The money will be given at 2 percent interest rate for a period of two years, including a six-month grace period.

The decision came at a meeting held at the Prime Minister's Office, attended by representatives from the finance ministry, the Bangladesh Bank and exporters.

"We are doing the paper work to finalise the modalities of the scheme," said a central bank official. He added that the finance ministry would get all the documents by today morning.

An official order clearing the mechanism for the soft loan is likely to be issued today, a finance ministry official told The Business Standard yesterday.

Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), is also hopeful that a decision regarding the distribution mechanism of the fund would be issued today.

Earlier on March 26, Prime Minister Sheikh Hasina announced a Tk5,000 crore stimulus package for the export-oriented industries that have been hit hard by the spread of Covid-19 worldwide. It was mentioned that the funds would be given for payments of the workers.

Since then, there was speculation that the money would directly be deposited to the accounts of workers.

According to finance ministry officials, however, now the government has shifted from its earlier position of parking the money in workers' accounts. Instead, the money will be deposited to accounts of the companies.

Exporters can avail the money from their respective banks, who will then submit the documents to the central bank for refinance.

The Bangladesh Bank runs a number of refinance schemes for lending to small and medium enterprises, women entrepreneurs, for green investment, etc. 

The central bank introduced its first refinance scheme in November 2001 for entrepreneurs in the agro-based products processing industries in rural areas.

Meanwhile, the BGMEA in a statement said some 1,041 factories reported cancellations and holding off export orders worth $2.87 billion as of yesterday.