UNB :
Banks will provide Tk433 crore loans to tannery owners for purchasing rawhide after Eid-ul-Azha, the highest rawhide collection season in the country.
Of these loans, four state-owned banks (Sonali, Janata, Agrani and Rupali) will provide Tk 258 crore.
Of which, Janata Bank Limited has set a target of providing the highest amount of Tk 120 crore. Last year, the same amount of loans were planned to be distributed, but finally Janata Bank disbursed Tk 40 crore only.
According to Bangladesh Bank (BB), the tannery owners will get bank loans of Tk 433 crore to buy raw hides. A portion of this loan has already been disbursed, the central bank sources said.
This year, Rupali Bank is giving loans of Tk 30 crore, Agrani Bank Tk 83 crore and Sonali Bank Tk 25 crore.
After the disbursement of loans in the leather sector in the nineties, most of the loans were not repaid. As a result, the private banks have stopped giving loans for this sector due to non-repayment culture of tannery owners.
Now all the four state-owned banks are lending more to buy raw-hide. Apart from this, a few private banks are giving a small amount of loans. Bank officials say there is a tendency among tannery traders to invest the loans money in other sectors. That is why they willingly become loan defaulters.
Meainwhile, Bangladesh has earned $ 1.25 billion by exporting hides, leather and other items in 2021-22 fiscal years.
Interestingly most of the tannery owners are not getting banking facilities due to non-registration of their plots.
Only 16 tanneries out of 157 are enjoying all the facilities including bank loans at the Savar Tannery Industrial City.
The executives of state-owned banks-Sonali, Rupali, Agrani and Janata-said that they would sanction loan facilities to leather businesses for ensuring the collection of a maximum number of rawhides of sacrificial animals, a major export item.
General Secretary of Bangladesh Tannery Association (BTA) Md Shakhawatullah said that the financial conditions of the tannery owners are not sound at present.
“We are not getting banking facilities to procure rawhides of sacrificial animals. The banks are not giving loans through third party mortgage as most of the tannery owners have already spent their money to construct new factories at Savar Tannery Village after relocating them from Hazaribagh,” he said while talking to The New Nation on Monday.
When asked regarding bank loan facilities, the BTA general secretary said, “We are facing a great problem as the authorities concerned are yet to handover their plots through registration. Commercial banks are not giving us loans against our factories without the land registration documents. But we are unable to do so as the plots are not yet registered.”
China and the USA are the biggest markets for leather, but the traders of those countries are now offering less prices due to coronavirus pandemic situation.
“We have no cash in hand after relocating the factories. State-owned commercial banks had disbursed Tk. 735 crore as loan to procure rawhides last year. But many owners failed to re-pay the loan due to tannery relocation, unsold stocks and the volatile condition of the international market,” Shakhawatullah said.
The price of cattle rawhide had been fixed by the government at Tk40-45 per sq ft last year.
Cattle rawhide outside of the capital has been set to Tk33-37 per square feet, while goatskin prices at Tk15-16 per sq ft.
