Kazi Zahidul Hasan :
Most apparel makers are facing difficulty to secure access to fund created for financing garment units to ensure building safety code due to high rate of service charges and stringent conditions, insiders said.
They said, the donor agencies, including JICA, IFC and USAID, have started disbursing funds as per their commitment through the concerned government agencies with 1.0 per cent service charge.
“The international agencies have extended the financing support to local apparel units for upgradation of their working conditions and implement building safety code fixing a nominal service charge. But now it becomes costlier because of additional charges slapped by the banks and other agencies,” former BGMEA President Abdus Salam Murshedy told The New Nation on Monday. According to him, now service charge goes up to 11 per cent although the donors offer it at 1 per cent rate.
“Even the agencies have also imposed tough conditions to avail the financing. All these are discouraging the apparel manufacturers to utilize the fund,” he added.
The former BGMEA leader said that apparel makers, who constructed their manufacturing units without following structural design commensurate with the Bangladesh National Building Code (BNBC), have to make additional investment of Tk 5.0 crore to make them fully compliant with building safety code.
“These factories are small and medium in size and they have little solvency to implement the task after making such a huge investment. They need soft-term loans. If they are now allowed to get the facility, the task of making a safe workplace would be difficult,” he observed.
Murshedy urged the authorities of Bangladesh Bank (BB) to fix a cheap rate of service charge for taking loans from the fund. “The rate should be 3 to 4 per cent without much condition,” he added.
“The government should offer a cheaper credit for the apparel makers who stepped forward for factory up gradation to adhere building code and compliance issues to meet the buyers’ demands,” BGMEA senior Vice-President Faruque Hassan told The New Nation yesterday. He said, restructuring the garment factories is a huge task and we cannot implement the task without the support of government agencies.
“We have already stepped forward to implement the task for the sustainable development of the country’s largest export sector,” he added. Faruk Hasan further said that apparel manufacturers have to invest a total of Tk 16,000 crore to come up with the task. They are now facing difficulty to manage the fund and the way of its financing. “A fund has already been created following the donors support. But the garment owners are not showing much interest to take loans from it due to high service charge,” he said.
He also said that the fund has been created after the tragic Rana Plaza incident and the donors were the sponsors of the fund. Its donors’ money and charging high service charge on it is ‘illogical’ when they (donors) are providing it at 0.5 to 1.0 per cent interest rate.
According to him, BB is taking 1.0 per cent service charge, the finance division 4.0 per cent and respective banks 5.0 per cent on the financing from the fund making it as high as 11 per cent altogether.
“Even we are getting cheaper loans from commercial banks for restructuring and retrofitting our factories. So, why should we go for such a costly loan from the government agencies? he questioned.
