Like Export Development Fund (EDF), the government is going to create a low-interest fund worth Tk 100 billion for the jute sector.
The fund formation is now at final stage as Financial Institutions Division has recently sought opinion from the finance division in this regard. The funds will be provided to the clients at a rate of 2.0 per cent interest.
Earlier, the Ministry of Textiles and Jute sent letters to the finance ministry and the central bank to create the special fund for the development of the jute sector, according to information available with Financial Institutions Division.
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.
Talking to the FE, Bangladesh Jute Mills Association (BJMA) Secretary Abdul Barik Khan said the government set up the EDF worth Tk 2.5 billion in 1988 for the exporters who are producing goods by importing raw materials.
Even though jute goods producers and exporters are using local raw materials, they are not getting such facilities, he said. "If the government provides funds, the jute sector will get a new life as it is passing through a bad time," he added.
A total of 170 jute mills are running under the BJMA, 94 under Bangladesh Jute Spinners Association (BJSA) and 23 under Bangladesh Jute Mills Corporation (BJMC). Nearly 40 million people are directly or indirectly engaged in the sector.
The country earned US$ 167.84 million from exports of raw jute and $ 794.58 million from jute goods in the fiscal year (FY) 2016-17 while $ 173.17 million from raw jute exports and $ 746.41 million from jute goods in the FY 2015-16.
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