BTMA demands increasing EDF loan limit

The Bangladesh Textile Mills Association (BTMA) has demanded the government to increase the loan limit from the Export Development Fund (EDF) for the millers from the existing $30 million to $40 million as well as an extension time for one year from June 30.

BTMA President Mohammad Ali Khokon made the demands in a letter sent to the deputy governor of Bangladesh Bank on June 1.

In the  letter, Mohammad Ali Khokon said that EDF has helped extending export growth but due to Covid-19 outbreak and price hike of raw material price, particularly raw cotton, yarn, dye-chemicals to more than three times, the present limit of EDF loan is not enough corresponding to the actual requirements.

If the limit is not increased and the deadline extended, spinning mills’ operation will be hampered, he said.

In May of last year, the central bank enhanced the loan limit to $30 million from $25 million as BGMEA and BKMEA demanded amid Covid-19 pandemic outbreak. The interest rate on loans taken from the fund was also reduced to 1.75 per cent from the previous 2 per cent.

Loans can be taken from EDF for import of goods through import letters of credit (LCs) or inland back-to-back LCs in foreign exchange.