The Financial Express

Stimulus package for RMG sector

Apparel sector's loan repayment period may be extended

| Updated: October 28, 2020 15:52:09

FE file photo FE file photo

The commerce ministry has sought necessary steps from the finance ministry to extend the existing loan repayment tenure to six years with one-year grace period.

The country's apparel owners took out the loan from the government's stimulus package for payment of wages and allowances to their workers.

As per the demand of local RMG makers, the recommendation was made at an inter-ministerial meeting held on October 5with the commerce secretary in the chair, officials said.

Representatives from different ministries and trade bodies were present in the meeting.

The meeting has decided to extend the loan repayment period to six years from existing two years. It has also decided to send the recommendation to the finance ministry for execution of the tenure.

Earlier, the Bangladesh Bank set the loan repayment period to two years with six-month grace period at 2.0 per cent service charge.

The RMG sector received over Tk 105 billion to pay April to July wages and allowances from the government as soft loan.

The government provided the loan to the apparel makers following their demand to help sustain competitiveness of the industry hit hard by coronavirus, a source said.

RMG export earnings year-on-year declined by 20.14 per cent to $2.25 billion in March'20, 85.25 per cent to $374.67 million in April, and 62.06 per cent to $1.23 billion in May, according to the official data.

Export earnings have started regaining since June when RMG shipments reached $2.24 billion.

In July, the country fetched a record $3.24 billion from apparel exports and in August last RMG exports recorded positive growth of 2.58 per cent to $2.46 billion year-on-year.

"We have received a letter from the commerce ministry, seeking the extension of the existing loan repayment tenure," an official told the FE on Friday.

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