Exporters now can repay EDF loans in three instalments 

The Bangladesh Bank has offered exporters with a facility to repay loans taken from its Export Development Fund (EDF) in three instalments. Until now, the entire loan liability has to be settled at a time.

"Repayment against EDF loans can be made partially for maximum two times and the remainder, if any, needs to be settled at one-go within the remaining admissible tenure," according to the guideline issued by the central bank on Thursday.

Exporters say they face problems in settling EFD loans at one-go as their export proceeds are not available simultaneously.

Shovon Islam, Managing Director of Sparrow Group, told The Business Standard, "This [the instalment facility] was much need for us. One more important thing is to keep the EDF loan limit at $30 million for each factory. Most large factories do not have any issue with repayments."

Shams Mahmud, managing director of Shasha Denim, said, "It is a very good move, which will reduce the cost of doing business as well as increase our cash flow."

The Bangladesh Bank provides foreign currency support from the EDF to exporters for imports of manufacturing raw materials. The tenure of such loan is 180 days, subject to the approval of Bangladesh Bank, this period can be extended by another 90 days.

Meanwhile, the central bank in another directive has extended the LC usance (payment) period for the raw materials imports of pre-fabricated steel structure industries to 360 days from the existing 180 days.

A usance or a deferred letter of credit (LC) means that even after having received goods or services, buyers get a grace period to make payments to financial institutions or banks.