Archive

          Bangladesh Bank (BB) will review the criteria and credit ceiling of Export Development Fund (EDF) to help export-oriented businesses get easy financing.
The central bank may also consider the value addition, now at 30 per cent.
Talking to the FE Governor of BB Salehuddin Ahmed said: "We will review the criteria on providing fund from the EDF to exporters and if it is found to be an obstacle to boost export we will consider the matter."
The EDF is worth $100 million.
Salehuddin, however, said 30 per cent value addition is not too high and if it is reduced than employment generating activities will be reduced.
Productivity of labour should be increased to raise export growth, Salehuddin opined.
Regarding the expansion of fund BB Governor said progress of fund utilisation is very slow and the US$ 1 million export finance facility at the heights is not too small.
After getting the proposal the BB will review the whole situation and will take decision positively.
BB currently provides the credit facilities for procurement of raw materials and spare parts by exporters and help then promote and diversify exports of higher value-added and non-traditional items.
Under the present criteria an exporter has to maintain 30 per cent value addition against the imports of raw materials to avail the credit facilities.
BB is providing credit in the range between US$ 0.5 million and 1.0 million against the letter of credit (L/C) opened by an individual exporter.
Talking to the FE president of the federation of Bangladesh chambers of Commerce and Industry (FBCCI), Mir Nasir Hossain, said the conditions of 30 per cent value addition is justified in view of the global competitiveness in export market.
Nasir said to survive in global export market in long term 30 per cent value addition criteria set by central bank is not too high.
Nasir, however, called raising the maximum credit ceiling of US$ 2.0 million from 1.0 million and increase the total fund to promote export business in the country.
Talking to the FE President of the Dhaka chamber of commerce and Industry (DCCI), M. A. Momen, said 30 per cent value addition criteria set by central bank to utilise EDF is reasonable as in South Asian Free Trade Agreement (SAFTA) and Bangladesh India Myanmar Sri Lanka Thai Land Economic cooperation(BIMSTEC) agreement exporters have to maintain 30 per cent value addition.
Momen said if it is reduced employment generation in the country will be affected.
Expressing the same views on the maximum credit ceiling Momen said for exporters like small and medium enterprises (SME) $1 million is sufficient.
Momen, however, emphasised to diversify the credit range for different export products depending upon in potentiality it global export market and export earnings.
Momen asked for easy and quick disbursement of credit facility to boost the country's export earnings.
Talking to the FE President of Bangladesh knitwear Manufacturer and Exporters Association (BKMEA) Fazlul Hoque said 30 per cent value addition criteria is justified, but maximum ceiling should be increased to $ 2 million to ease the financing of exporters.
BB is currently providing the EDF export credit facilities to potential exporters through commercial banks at one per cent interest rate puls London Inter-Bank Offer Rate (LIBOR).