RMG owners seek Tk14,000cr soft loan before Eid

The country's garment manufacturers and exporters have sought the urgent release of outstanding cash incentives and a Tk14,000 crore low-interest "soft loan" to help factories pay workers' wages and bonuses ahead of Eid-ul-Fitr.

In a letter to Bangladesh Bank Governor Ahsan H Mansur, the Bangladesh Garment Manufacturers and Exporters Association said the support was needed to ease potential cash-flow pressure in the run-up to the festival.

A two-member BGMEA delegation – Senior Vice-President Inamul Haq Khan Bablu and Vice-President Shehab Udduza Chowdhury – handed the letter to the governor during a meeting on Tuesday afternoon (24 February).

Highlights: TBS

Speaking to reporters after the meeting, Shehab said around Tk5,700 crore in cash incentives for the ready-made garment sector remains unpaid.

"We have requested that the outstanding incentive funds be released quickly so that factories do not face difficulties in paying wages and Eid bonuses," he said.

In addition, the association has asked for a soft loan equivalent to two months' wages on easy terms.

According to BGMEA estimates, the sector's monthly wage bill stands at about Tk7,000 crore. That means factories would require roughly Tk1,400 crore to cover two months' wages – the amount mentioned in the letter as the proposed soft loan.

Shehab further noted that not all factories receive incentives equally. Woven and sweater factories, in particular, receive comparatively lower support, putting them under greater strain when it comes to paying wages.

He added that in February and March, nearly 25 out of 60 days were affected by public holidays and election-related closures. "Paying 60 days' wages after only 35 working days will be difficult for many factories," he said.

The governor has assured the delegation that he would speak to the relevant ministry regarding the quick release of incentive funds, according to BGMEA. 

On the issue of salary support, he advised the association to approach the Ministry of Finance. The governor made no negative remarks and received the proposals positively, the BGMEA leaders claimed.

Call for priority for SMEs

The BGMEA has also called for special priority for small and medium enterprises, warning that SMEs may be deprived under the existing "first in, first out" system used in distributing incentives. 

The association said a separate mechanism is needed for SMEs and has sent a letter to the relevant ministry proposing the creation of a dedicated fund for the sector.

It suggested that funds allocated from the budget should first be distributed to SMEs on a priority basis, with the remaining amount disbursed to other factories.

Shehab said the governor responded positively and instructed the relevant department to look into the matter. He expressed hope that the change could be implemented in the next round of incentive distribution.

Responding to questions about why the association approached the central bank when incentive funds are allocated by the government, the BGMEA said it had already written to the Ministry of Finance and held meetings with the finance minister and finance secretary. 

The meeting with the governor was part of regular policy coordination, it added.

Asked why such loan demands arise before Eid each year, the BGMEA leaders said the current situation is different.

They cited recent political unrest, protests, labour dissatisfaction, and the election climate as factors affecting industrial activity. They also said the export sector has come under pressure from tariff policies introduced by US President Donald Trump.

Export growth has remained negative for the past seven months, according to the association. In this context, the BGMEA said, quick support is needed to help sustain the industry.