EDF loan disbursement deadline extended till 30 June

The deadline for disbursement of loans from the Export Development Fund (EDF) has been extended by six months till 30 June to assist exporters in tackling the Covid-19 pandemic impacts.

The new deadline was announced in a circular issued by the Foreign Exchange Policy Department of the central bank on Wednesday.  

The previous deadline expired on 31 December last year.

The new deadline will only be applicable to members of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), and Bangladesh Textile Mills Association (BTMA).   

BGMEA and BTMA members can currently borrow up to $30 million under this refinancing scheme. The previous limit was $25 million.

Exporters can borrow in foreign currency from the fund to procure raw materials and parts for export products.

The fund is playing an increasingly important role in export development. As its demand grew significantly during the pandemic, the Bangladesh Bank in August last year eased borrowing conditions.

Before that, an exporter failing to bring in export money within four months (120 days) was not eligible to borrow from the fund.

The central bank extended the limit by two years (720 days) and said this would be effective till 31 March this year.

EDF was introduced in 1989 to assist the export sector.

Prime Minister Sheikh Hasina directed the authorities concerned to increase the size of the fund while announcing stimulus packages to tackle Covid-19 fallouts last year.

As per the directive, the size of the fund was increased from $3.5 billion to $5 billion on 7 April last year. The interest rate was also brought down to 2%.