Bangladesh Bank plans to lend low-cost loans from its ‘Export Development Fund’ to big exporting industries, bringing changes in the current regulations governing the fund that is only used to boost non-traditional export items.
Any industries selling their goods abroad, besides readymade garment, leather or food, will be eligible for the fund to be charged two per cent interest, a senior BB official said.
The facility will be made available under a proposed ‘financial sector support project’ to be financed jointly by the World Bank and the government, he added.
The BB senior officials recently held a series of meetings with a World Bank team on the project, largely to be aligned to cater to the needs of large and medium size export-oriented industries as the sector faces shortage of running capital due to high interest-bearing local funds and dwindling export orders from the buyers.
‘The WB has assured us of providing loan to back large export-oriented industries and salvage a good number of  medium size entrepreneurs having huge debt of local banks and image crisis in western markets after the deadly industrial disaster of Rana Plaza,’ an executive director of BB told New Age.
The fund to be committed by the Washington-based international lender under the proposed project could be between US$ 500 million and US$ 1 billion in the first phase, he added.
The BB officials concerned said the EDF that finances only non-traditional export sector at a rate of LIBOR plus 1.5 per cent and disburses US$ 5 million at the highest against a single exporter will see an upward revision in the ceiling under the proposed project.
The fund from the invigorated EDF could be used to import capital machineries, technology upgradation and safety improvements of factories along with meeting import costs for raw materials for export-oriented goods, sources said.
Under the proposed project, loans for constructing warehouses and cold storages for selected agricultural commodities will be provided to aspirant entrepreneurs as such investment would help farmers to store their produces.
The BB officials said the loan amount from the WB and its terms are being negotiated with finance ministry officials.
Asked, the finance officials admitted and justified the project’s usefulness.
The finance officials said the finalisation of the project could take a couple of months as the Economic Relations Division under the finance ministry is now pursuing the issue with the WB’s local office.