Apparel and textile exporters can now take low-cost loans of up to $25 mn from the Export Development Fund after the central bank yesterday increased the limit from $20 mn. Members of the Bangladesh Garment Manufacturers and Exporters Association and Bangladesh Textile Mills Association can borrow from the fund against their letters of credit or firm export contracts, said recently.
The EDF was launched with an initial amount of $100 mn in 2005, which was gradually increased to $3 bn. The loans are payable by the banks upon receipt of export proceeds within 180 days of the date of disbursement. The interest rate on loans from the fund is now LIBOR plus 2.50 per cent.
The central bank had increased the ceiling in response to applications from the BGMEA and the BTMA, said Faruque Hassan, Senior Vice-President of the garment makers’ apex trade body. The foreign suppliers show interest when the local manufacturers operate their business borrowing money from the central bank’s fund, said Abdus Salam Murshedy, Managing Director of Envoy Group.