The Bangladesh Bank has extended Export Development Fund (EDF) loans to member mills of the Bangladesh Garments Accessories & Packaging Manufacturers & Exporters Association (BGAPMEA).
“The EDF loans will be available also to member mills of the BGAPMEA making bulk import of raw materials for local deliveries of garment accessories to manufacturer-exporters against inland back to back letters of credit (LCs) in foreign exchange,” the Bangladesh Bank circular said.
An EDF loan to an Authorized Dealer, generally a foreign exchange branch, against their foreign currency financing of input imports of BGAPMEA member mills, shall not exceed the value realized in foreign exchange against inland back to back LCs over the past twelve months, or US$ 1million, whichever is lower, the circular added.
The Authorized Dealers are currently allowed to borrow from EDF against their foreign currency loan to Bangladesh Textile Mills Association (BTMA) mills to make bulk import of raw cotton and other fibres against deemed exports.
At present, the commercial banks are provided loans by the Bangladesh Bank under the EDF scheme at the London Inter-bank Offered Rate (LIBOR) plus 1.0 percent interest. The commercial banks in turn extend credit to exporters at the LIBOR rate plus 2.50 percent interest.
