Primary textile sector still deprived of bailout funds

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The principal textile sector is yet to get funding from the government's Tk 30,000 crore stimulus package, despite being in dire straits as a result of ongoing coronavirus pandemic.

Carrying out a slump in revenue, manufacturers struggling to resume operations completely due to too little working capital, resulting in large stockpiles of yarn and various other fabrics.

Spinning, weaving and dyeing factories meet the criteria for a loan, according to the guidelines banks must follow when disbursing money from the stimulus bundle.

From the $8 billion committed to the principal textile sector, Tk 20,000 crore has been lost to the coronavirus fallout, various millers said.

Making matters worse, about 11,000 micro, tiny, medium and large organizations engaged in the industry could not manufacture any items in the March-April period as it coincided with the government's two-month nationwide lockdown targeted at curbing the spread of coronavirus within Bangladesh.

Due to this fact, these millers missed both biggest revenue windows of the entire year -- Pahela Baishakh and Eid ul Fitr, they added.

No one has had the opportunity to avail the loans from the bailout package as of yet, said Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association (BTMA).

The principal textile sector requires heavy investment since its operational costs are so high and because of the coronavirus outbreak, the sale of yarn and other fabrics has dropped significantly.

Besides, international demand commenced to get again after shops started reopening in america and EU, the two major export locations for Bangladeshi garment goods.

Therefore, millers want a huge amount of funding in order that they are able to restart their businesses, Khokon added. Currently, the quantity of spinning mills operating in the united states stands at 450 with total investment in the sector amounting to Tk 40,000 crore, explained Monsoor Ahmed, secretary to the BTMA.

Moreover, Tk 30,000 crore is invested in the weaving and dyeing sectors, he said, adding that those units want immediate loans to provide recycleables for the garment sector.

"Banking institutions are reluctant to get applications from us. I have corrected my application many times as my bank cited new excuses over and over," said Rashidul Hasan Rinto, proprietor of Chistia Sizing Mills.

Rinto is wanting to borrow Tk 1.20 crore to expand his factory in Narsingdi.

Millers who serve community markets with traditional garbs want sarees and lungis are actually also acquiring themselves in big trouble for several reasons.

For instance, export-oriented textile millers who manufacture yarn and other fabrics are now targeting the neighborhood market because of a slump popular from apparel exporters.

Due to the excess source, the cost of yarn fell significantly in the domestic industry, Rinto said.

A month ago, yarn sold for Tk 130 per pound. It really is now selling at Tk 110 per pound.

Besides, millers possess the added concern of preserving unsold stockpiles as a result of decreased demand, he added.

"This time around, I expect the lender to disburse the mortgage as Bangladesh Lender asked the scheduled banks to complete disbursements from the stimulus deals by the following month," Rinto told The Daily Superstar over the phone.

On July 2, the central bank issued a notice directing all scheduled banks release a a major portion of the bailout bundle as loans by the finish of the existing month as the remainder is usually to be distributed the following month in a bid to ensure correct utilisation of the funds.

Like Rinto, Abdullah Al Mamun, director of Abed Textile Processing Mills, is looking forward to his application for the loan to get approved.

"I am hoping that my lender will disburse the amount today as the central lender asked scheduled banks to make easy disbursements," he added.

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the association in charge of coordinating the disbursement of loans from the government stimulus packages, expects to visit a reasonable flow of funding for both existing and new applications soon.

"The momentum ought to be visible to all within two weeks. District organization chambers and sectoral associations are touching FBCCI in this regard," stated FBCCI President Sheikh Fazle Fahim.

Working out the challenges faced simply by borrowers is a continuous process that requires frequent communication between the government and different stakeholders. To streamline the procedure, applications, disbursements, approvals, declines and customer service is being monitored by the FBCCI, Fahim added.

By July 1, Bangladesh Lender approved applications to disburse a total around Tk 4,100 crore from the Tk 30,000 crore-package.
Source: https://www.thedailystar.net

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