In a joint letter to the finance minister on 20 June – Two apparel exporters’ associations, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) appealed for extension of the current moratorium on loan repayment by six more months.
The two leading trade bodies demanded not to classify their bank loans in the next six months if they cannot pay the installments.
The joint letter to the Finance Minister said, “Loan repayments on time have become tough for the entrepreneurs since businesses are yet to return to normal and the liquidity crisis intensifies.”
The letter signed by BGMEA President Faruque Hassan and BKMEA President AKM Salim Osman emphasized the ongoing difficult hurdles in the textile and apparel sector.
The letter said the government and the entrepreneurs expected that the COVID-19 pandemic would recede and the readymade garment (RMG) sector would recover. However, as the frequency of COVID-19 does not decrease, the RMG entrepreneurs are going through a rough time.
Stating the price hikes of apparel raw materials, the letter said they now have to pay $4.5 for raw materials while the previous cost was just $2.5. But, the real price of clothing has not improved, rather fell in some cases. Entrepreneurs have been enforced to continue exporting with losses just to survive.
The two associations said their liquidity crisis is rising due to non-receipt of timely payments from foreign buyers and continuing production with losses. RMG entrepreneurs are also extremely concerned about the future of the industry, the investment situation and other operations including worker payments.
The letter said, the annual bank-closing [finalizing the calculations for the current fiscal year] is slated for this June as there will be Eid-ul-Azha celebration in July. Factory owners will need a lot of money to pay the workers’ salaries and bonuses.
In 2020, the govt. extended the loan moratorium for apparel makers until December last year, after the COVID-19 pandemic broke out. Later the govt. extended the repayment deadline twice to 30 June 2021.