Bangladesh’s garment exporters have urged the central bank to bring export loan interest rates down to single digits and introduce easier financing conditions for small and medium-sized enterprises (SMEs), as the industry faces mounting financial pressure.
Leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) made the request during a meeting with Bangladesh Bank Governor Md Mostaqur Rahman at the central bank headquarters in Dhaka on Wednesday.
The business delegation, led by BGMEA President Mahmud Hasan Khan, presented a series of recommendations aimed at easing liquidity constraints and supporting the country’s export-oriented apparel sector.
During the meeting, BGMEA representatives said many factories are currently facing severe cash flow shortages, making it difficult to pay workers’ wages and meet operational costs such as electricity and utility bills.
According to the association, delays in the disbursement of government incentives are further intensifying financial pressure on manufacturers. BGMEA warned that if incentive funds are not released regularly and on time, many factories could be forced to shut down, potentially affecting employment across the sector.
Bangladesh’s ready-made garment industry, which accounts for more than 80 percent of the country’s export earnings, has been navigating a challenging period due to global economic uncertainty and domestic financial constraints.
Mahmud Hasan Khan told the governor that policy support remains crucial for maintaining industry stability and encouraging new entrepreneurs to invest in the sector.
BGMEA leaders also proposed increasing the special cash incentive rate for exporters from 0.30 percent to 1 percent. They recommended raising the alternative cash incentive, used instead of bonded warehouse and duty drawback facilities—from 1.5 percent to 2 percent.
For small and medium-sized enterprises, the delegation proposed increasing the incentive rate from 3 percent to 4 percent in order to strengthen the competitiveness of smaller manufacturers.
In addition to incentives, exporters urged the central bank to reduce the interest rate on packing credit to 7 percent to ease financing costs associated with export production.
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They also requested that the Pre-Shipment Credit Refinance Scheme be expanded from Tk 5,000 crore to Tk 10,000 crore and that the programme’s tenure be extended until 2030.
BGMEA leaders said that although some banks have rescheduled loans, many are still reluctant to provide new working capital financing, creating operational difficulties for factories and affecting their ability to repay existing loans.
The delegation also raised concerns about difficulties in encashing fixed deposits and export proceeds held in several consolidated Islamic banks, including former EXIM Bank and First Security Islami Bank.
Bangladesh Bank Governor Md Mostaqur Rahman assured the industry leaders that the central bank would take effective measures on issues within its jurisdiction.
He also addressed concerns regarding delayed incentive payments, stating that the central bank would ensure that no applications remain pending going forward.
To reduce liquidity pressure on exporters, the governor said arrangements would be made so that monthly cash incentives are disbursed within the same month.
Industry representatives expressed optimism that swift action from the central bank could help the garment sector navigate current challenges, maintain employment levels and sustain export growth.
The BGMEA delegation said continued policy support would be critical to help the industry overcome global economic pressures and regain its growth momentum in the coming months.
