Bangladesh garment owners seek more time to repay pandemic loans
Despite an uptick in exports, garment factory owners have asked for more time to repay the loans disbursed by the government under a stimulus package to help the key sector offset the economic fallout from the global coronavirus pandemic.
The owners took out loans of Tk 105 billion at a minimal interest rate from the government fund to pay worker salaries and allowances for the months of April to July.
The scheme requires factories to clear the debts in 18 equal instalments over two years, with a grace period of six months. But now the owners have applied for five years' time to pay back the loans.
Rubana Huq, president of garment exporters' lobby Bangladesh Garment Manufacturers and Exporters Association, wrote to Commerce Minister Tipu Munshi about the demand on Sept 9.
The BGMEA chief solicited 'cooperation' and 'compassion' from the commerce minister, who himself is a former president of the lobby.
"The garment sector is passing through a tough time due to the COVID-19 pandemic. That is why we asked for five years' time to repay the loans," BGMEA Secretary Abdur Razzak told bdnews24.com.
But Prime Minister Sheikh Hasina will have the final say on the matter, according to Finance Minister AHM Mustafa Kamal.
The BGMEA's letter highlighted the travails of the industry during the pandemic and said it will take eight to nine months to receive the payment for recent and past work orders placed by the buyers. Therefore, it will be 'nearly impossible' to repay the loan within the stipulated time, it argued.
"Like BGMEA, we believe that our demand is legitimate," Mohammad Hatem, vice president of BKMEA, told bdnews24.com about the appeal for a time extension to repay loans.