EDF facility for textile, apparel makers extended

The Bangladesh Bank yesterday extended the increased borrowing limit from the Export Development Fund (EDF) for textile millers and garment makers to December 31 this year. 

In January, the central bank raised the loan limit to $30 million from $25 million in order to help exporters offset the business slowdown originating from the coronavirus pandemic. The disbursement deadline was set for June 30, 2022.

Now, the facility for the members of the Bangladesh Textile Mills Association and the Bangladesh Garment Manufacturers and Exporters Association has been extended to December 31, according to a notice of the central bank. This is the third extension.

The size of the EDF stands at $7 billion.

In another notice, the central bank asked banks not to disburse loans from the EDF among the clients if they fail to repay from their export earnings.

In June, the BB asked banks to refrain from forwarding applications of EDF loans, irrespective of the nature of imports, for customers whose liabilities have been settled through funded facilities in the immediate past 180 days.

Yesterday, it said the EDF loans are required to be settled out of export proceeds/foreign currency funds.

So, it has been decided that the customers whose EDF liabilities have to be settled through funded facilities will not be accessible for further loans under the scheme from now onwards, the BB added.

Funded facilities are loans where banks and financial institutions provide real cash to their clients.