Bangladeshi textile and garment makers entitled to take EDF loan up to $15 million

The Bangladeshi textile and garment makers were entitled to receive Export Development Funds (EDF) loans upto $12 million at 2.5 percent interest rate. But now, the central bank has increased the limit for manufacturers and exporters to borrow from the EDF to $15 million. Textile and garment makers will benefit from the central bank’s move, said BTMA President Jahangir Alamin. Members of Bangladesh Textile Mills Association, Bangladesh Garment Manufacturers and Exporters Association and Bangladesh Knitwear Manufacturers and Exporters Association can borrow the amount against letters of credit, firm export contracts and inland back to back LCs. However, the Bangladesh Bank in its notice has clearly state that this maximum borrowing limit is also admissible for member mills of BTMA making bulk import of raw cotton and other fibres against local deliveries of yarn to manufacturers-exporters through inland back to back LCs in foreign exchange. Textile makers can borrow money from the EDF for importing cotton only, not capital machinery. The EDF has become a popular instrument for borrowing funds among the textile and garment makers due to its low interest rate in comparison to rates charged by private banks.