To buy rawhides, tanners to get Tk 2.7b loan from state banks

FE Report | Published: June 15, 2024 22:57:24

Four state-owned commercial banks will provide around Tk 2.70 billion in loans to tanners to help them purchase rawhide of sacrificial animals during the upcoming Eid-ul-Azha.
Janata Bank, Rupali Bank, Agrani Bank and Sonali Bank will disburse the loan. Some private commercial banks will also offer limited loans to relevant traders.
Tanners received Tk 2.59 billion loans during the last Eid-ul-Azha.
Usually, state-run banks disburse credit to the leather sector every year based on funding needs, according to a senior Janata Bank official.
He told The Financial Express that Janata Bank expects to disburse around Tk 800 million to over 25 traders.
Banks may consider additional loans based on bank-client relationships.
According to the Bangladesh Bank data, banks disbursed Tk 51.22 billion to the local leather sector. Of this total, Tk 41.45 billion, or roughly 91 per cent, has defaulted. Only around 9 per cent of these loans have been repaid by borrowers.
Around 92 per cent of loans disbursed by state-run banks have defaulted.
Many loan recipients have not made payments on their loans. These loans, intended as working capital for rawhide and skin procurement, have a 9-month repayment term from disbursement.
Consequently, most disbursed loans have been classified, according to a source.
Prices for salt-applied rawhide and skins have been set for the upcoming Eid-ul-Azha, reflecting a Tk 5.0 increase over last year.
Prices for salt-applied sacrificial cowhides have been set at Tk 55-60 per square foot (sq ft) in Dhaka and Tk 50-55 per sq ft outside the capital city.
Goatskins are priced at Tk 20-25 per sq ft, while baqri skins at Tk 18-20 per sq ft.
The minimum price per whole cowhide is Tk 1,200 in Dhaka and Tk 1,000 outside Dhaka.
Last year, the prices of rawhides of sacrificial cows were Tk 50-55 per square foot (sqft) in the capital city and Tk 45-48 per sqft outside of Dhaka.
The price of goat hides/skins was Tk 18-20 per sqft and the prices of baqri skins was Tk 12-14 per sqft.
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