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Bangladesh : BANGLADESH BANK increases loan limit for exporters to $15 million

June 25, 2014

The central bank has announced an increase in the limit for manufacturers and exporters to borrow from the Export Development Fund (EDF) from the existing $12 million to $15 million.

The amount can be borrowed by Members of Bangladesh Textile Mills Association, Bangladesh Garment Manufacturers and Exporters Association and Bangladesh Knitwear Manufacturers and Exporters Association against letters of credit, firm export contracts and inland back to back LCs.

Bangladesh Bank said, This maximum borrowing limit is also admissible for member mills of BTMA making bulk import of raw cotton and other fibres against local deliveries of yarn to manufacturers-exporters through inland back to back LCs in foreign exchange.

The EDF has emerged as an important instrument among the textile and garment makers due to its lower interest rate compared to rates charged by private banks.

At present, the textile and garment makers receive EDF loans at 2.5 percent interest rate.

BTMA President Jahangir Alamin, said, Textile and garment makers will benefit from the central bank's move.

Textile makers will be able to borrow money from the EDF for import of only cotton, and not capital machinery.

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Source: TendersInfo (India)

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