Textile millers have urged the central bank for raising its Export Development Fund (EDF) loan limit and extend repayment period to help primary textile sector grow further. Bangladesh Bank should raise the EDF loan limit to $20 million from present $15 million and extend repayment period to 270 days from 180 days now, president of Bangladesh Textile Mills Association (BTMA) Tapan Chowdhury demanded Saturday. The demand came at a seminar titled: ‘Export Development Fund (EDF)- Towards the Growth of Textile Industry,’ organised by BTMA in the capital. Tapan also demanded extension of EDF facilities to weaving, dyeing and printing-finishing sub-sectors of primary textile sector (PTS) for raising the sector’s value addition and competitiveness. “Apart from uninterrupted and reliable supply of energy and power, we need more financial support in the form of credit facilities at low interest rate to import cotton, other man-made fibres, dyes and chemicals in large volume,” Tapan said, adding: “Here EDF can play a significant role.” Established in 1989, EDF is an incentive to the exporters and is intended to facilitate access to financing in foreign exchange for input procurements by manufacturer-exporters. The main objective of EDF is to promote export of non-traditional items manufactured in the country and to meet up the liquidity shortages of export oriented business for import of raw materials. The size of EDF is now $1,500 million. Authorised Dealer (AD) banks can borrow funds in US dollar from the EDF against their foreign currency loans to manufacturer-exporters for input procurements. BB charges LIBOR+1.5% interests on six-month EDF loan disbursements to ADs, while ADs charge LIBOR+2.50% interests from their clients. BTMA president said though the EDF facility is available to spinning mills but because of lack of awareness and knowledge many mills can not avail this facility. Besides, the BTMA member mills using EDF facilities find the existing limit insufficient to meet their actual needs, he added. Because of global cotton price volatility, millers sometimes find it hard to meet their fund demands with low EDF limit, which compels them to take loans from banks at very high interests, the sector leader pointed out. If the issues are addressed properly, Tapan thinks that the country’s whole apparel industry is ready to earn the targeted $50 billion from exports by 2021. At present, Bangladesh is in second position importing around 5.5 million bales of cotton in 20104 valued at $2.56 billion. The industry’s growth rate is 83 percent in a decade.
