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Apparel makers to get loan at 2% to pay workers wage

The Coronavirus affected apparel factories can avail funds from the government bailout package of Tk 5000 crore at 2% interest to pay their workers’ salaries for up to three months. Earlier, Prime Minister Sheikh Hasina announced a bailout package of Tk5000 crore for the export-oriented sector, who incurred losses due to the outbreak of coronavirus.

Bangladeshi-Apparel-makers-get-loan-2%-pay-workers-wage
Figure: Affected apparel factories can avail funds from the government bailout package of Tk 5000 crore at 2% interest to pay their workers’ salaries for up to three months.

On Wednesday, the Ministry of Finance revealed the guideline for the disbursement of the Taka 5,000 crore stimulus package for the export-oriented industries.

According to the guideline, an affected export-oriented apparel manufacturer can take a loan from the package at 2% interest to pay their workers’ salaries for up to three months. But the wages of workers must be paid to either a bank or mobile financial service account, the guideline stated.

“It is not a grant. The loan will have to be repaid within a certain period,” said Tipu Munshi, Commerce Minister while speaking at an inter-ministerial meeting on prevention of coronavirus in the country.

Apparel makers, who at least export his or her 80% products, will be eligible for the loan. Thus, an owner or management of those industries could take a loan from that fund and could disburse the salaries of their employees and workers for the three months including April, May and June 2020.

As per the guideline, the Finance Division will give Tk5000 crore to Bangladesh Bank from budget allocation. On demands, Bangladesh Bank will disburse it to different commercial banks as loans without any interest and the commercial banks will lend it at 2% to the export-oriented eligible business people.

As per the guideline, the borrowers will get a six-month grace period. After that she/he will start paying to repay the money through installments to the government by the next two years.

In this global grim scenario, maximum Bangladeshi garment factories were closed. Although there is an option of keeping them open if there are work orders from international retailers.

“The government has no directives about the closure of garment factories. If the factory owners want, they can run their factories following proper health guideline,” Tipu Munshi added in this regard.

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