The country’s textile mill owners have sought low-interest bank loans to help cover workers’ wages and utility bills for July, saying that the industry faced significant financial losses due to the disruption of business operations amid the recent unrests over quota-reform movement.
The Bangladesh Textile Mills Association on Wednesday in a letter to finance minister Abul Hassan Mahmood Ali also demanded suspension of the repayment of term loans’ instalments until January 2025.
The BTMA letter signed by its president Mohammad Ali Khokon urged the finance minister to take necessary measures to ensure the timely payment of accepted and matured bills by commercial banks for the yarn and fabric supplied by BTMA member mills through back-to-back letters of credit.
‘Despite the government’s unwavering commitment to maintaining economic activity during the past two weeks of this unexpected crisis, we have encountered several unintended business setbacks,’ Khokon said in his letter.
He said that it created challenges accessing markets due to the delays in procuring raw materials.
Local mills could not sell their products, and export mills were facing difficulties in ensuring timely delivery of their goods and so, the mills are experiencing severe financial distresses, the letter said.
The BTMA said that the backward linkage industry was dealing with cancelled orders, reduced production, worker absenteeism and disruptions in the supply chain for raw materials.
‘These challenges have created a difficult environment for textile industry owners while the deadline for workers’ wages for July 2024 is approaching,’ it mentioned.
The BTMA urged the government to provide loans for a period of one year at a maximum interest rate of 2 per cent to avoid disruptions in wages and allowances payments to workers.
The trade body also requested loans with same interest rate for the payment of gas and electricity bills for July 2024.
The BTMA requested the Bangladesh Bank for the suspension of term loan instalments for the next six months, making these instalments interest-free.
It also demanded intervention from the finance ministry and the Bangladesh Bank to ensure the timely payment of accepted and matured bills by commercial banks for the yarn and fabric supplied by BTMA member mills through back-to-back LCs.
Receiving these payments would help alleviate some of the working capital shortages faced by member mills and support their ongoing operations, the BTMA letter said.
