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80pc export-oriented factories to get loans

MoF's decree on Tk 50b stimulus

FE REPORT | April 01, 2020 00:00:00

Manufacturing units, having at least eighty per cent export-oriented business, will be eligible to get loans from the government-announced Tk 50-billion stimulus package, designed to pay salary of their employees.

The Ministry of Finance (MoF) sent broad-based directives to the Bangladesh Bank (BB) on Tuesday for making the fund operational.

The central bank will issue a guideline soon, detailing modalities of the fund, officials said.

According to the MoF directive, money from the fund will be available in the form of concessional loan, and the borrowers will be charged interest at 2.0 per cent rate.

The BB will administer the fund, which will be disbursed by both public and private sector banks.

The money will be directly sent to the bank accounts of manufacturing units' employees instead of giving to their owners.

Top manufacturing sectors, like - clothing, leather, jute, and pharmaceuticals, will get priority in getting the fund.

"Today we sent the directives to the central bank," Finance Division additional secretary Habibur Rahman told the FE on Tuesday.

"Now the BB will issue necessary guidelines based on our directives," he added.

Finance Division joint secretary Shirajun Noor Chowdhury told the FE that the factory owners will get loan from the fund to pay salary of their employees for the next three months.

"Neither the government nor the central bank will realise any charge against the loan. The banks concerned will get 2.0 per cent as service charge," he noted.

According to officials concerned, the money is likely to be available for disbursement in the first week of April.

In a televised speech on March 25, Prime Minister Sheikh Hasina announced the bailout package to support the export-oriented manufacturing industries, affected by Covid-19 pandemic.

Following spread of the virus worldwide, global buyers have cancelled or suspended work orders of the apparel sector worth US$3.0 billion. Many other export-oriented sectors are also facing the same problem.

Amid the situation, the factory owners have cautioned that paying salary to their employees will be difficult for them unless the government offers a financial package.


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