The deadline for repaying loans taken out by readymade garment factory owners from the Covid-19 stimulus package has been extended for another six months.
The Finance Division has taken the decision and asked the Bangladesh bank to issue a circular allowing another six months, starting on 1 March, for the borrowers to repay loans.
Also, there will be a condition for factory owners to repay loans in 18 instalments without a 12-month grace period.
In mid-February, Prime Minister Sheikh Hasina promised to extend the loan repayment deadline at the request of factory owners.
The government last year announced two bailout packages to help the apparel industry deal with coronavirus impacts.
The size of the first package was Tk5,000 crore, and it was for paying workers' salaries and allowances. There was no interest on loans taken out from the package, except for a 2% service charge.
But as the amount was inadequate, another Tk5,500 crore was added to the package. The interest on loans taken out from the additional portion was set at 4%.
The second package comprised working capital of Tk30,000 crore. The interest on loans taken out from this package was set at 4%. The Tk5,500 crore loan was taken out from this package to pay workers.
Apparel is one of the major sectors of the economy, and 40 lakh workers are directly involved in it. More than 80% of export income comes from this sector.
The pandemic impacted apparel export earnings. In the first seven months of the current financial year, export income of the sector fell by 3.44% compared to the same period of the previous fiscal year.