BGMEA seeks one more year to pay stimulus loans

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has sought one more year to repay the loan for the stimulus packages.

At the same time, the organisation has asked the authorities concerned to reschedule the loans of the entrepreneurs who could not repay installments on time and terminate the field-specific loan accounts.

The BGMEA president Faruque Hassan made the request in writing to Finance Minister AHM Mustafa Kamal.

According to sources in the Finance Department, the proposal made by the BGMEA is unlikely to be considered for the time being since the RMG makers are gradually coming back to business as they are overwhelmed with orders.

Under the circumstances, the authorities think that it should not be a problem for the RMG manufacturers to repay their bank loans.

In this regard, BGMEA vice-president Shahidullah Azim told The Business Post that the government has given them 24 months to pay the loan against the incentive packages. Now they are making request to extend it to another 12 months.

“The government has yet to decide on the issue. We want the government become flexible about regular loans. Entrepreneurs have not been able to meet bank loan installments on time due to the pandemic,” according to Azim.

The trade leader explained that it is necessary to give financial assistance to reinforce RMG sector battered by the pandemic because if they are back in the game in full swing, some 15-20 thousand people will find employment.

The BGMEA claims that the liquidity crisis has been exacerbated by the onset of coronavirus, its second wave, and above all its delta variant, which has hit the sector hard.

Even then, in order to retain foreign buyers and workers in the hope of future gain, export activities are being continued despite a loss incurred by the garment industry, it said.

“Our debt is on the rise and we are facing liquidity crisis to pay wages and allowances of the workers. Due to various reasons including the Covid-19, the garment industry is going through a rough patch,” argued Shahidullah Azim.

In the letter addressed to the finance minister, the apex trade body of the clothing sector said the export-oriented garment industry owners seek a flexible attitude of the government since they are unable to repay all their loans on time, including term loans, recurring loans and current loans.

In maintaining the existence of the industry and keeping the workers employed, it is necessary that the government play a supportive role, the letter mentioned.

It further said considering the special importance of the garment industry in the national economy and the devastating effects the industry went through due to the raging pandemic, all charges including loan interest charges be waived, and loans be rescheduled for a period of 10 years with a grace period of two years.

In order to keep the readymade garment industry operational, incentives of Tk 10,500 crore were given in three installments just to pay the wages of the workers.