Govt forms committee to create Tk 100b fund for jute sector

The government has set up an inter-ministerial committee aiming to create a low-interest fund of Tk 100 billion to help boost the jute sector.

The six-member committee will fix the source of fund and its operational method and make related policy for the proposed fund.

It will submit a report to the government within next 30 days and put forward recommendations for creating the soft-loan fund. Once the government launches the fund, jute producers and exporters will get loans at 2.0 per cent interest rate.

The committee has been formed with representatives from the finance and commerce ministries, Bangladesh Bank (BB), Bangladesh Jute Mills Corporation (BJMC) and Department of Jute. The ministry of textile and jute (MoTJ) has issued an office order in this regard.

The committee will also review the proposals made by the finance and commerce ministries and the central bank in this regard.

The move to create the fund came up at a meeting of the advisory committee on jute which was held last year.

The MoTJ last year requested the finance ministry and the central bank to form the development fund for the jute sector, a finance ministry official said.

Sector insiders said they have long been demanding formation of the fund as jute producers and exporters are facing financial crisis to run their business. They have also urged the government to launch the fund as early as possible.

Exporters who produce finished products by importing raw materials get loans from Export Development Fund (EDF) at only 2.0 per cent interest rate, but jute exporters are not eligible for the fund, they added.

Export-oriented sectors, including ready-made garment, leather, footwear, ceramics and plastic, are getting low-cost loans from Tk 2.5 billion EDF, a BJMC official said.

Other export sectors which rely on imported raw materials for producing finished products also get credit support, he mentioned.

The central bank's policy for EDF should be changed so that the jute sector can derive benefit from the fund, he noted.

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