Economic Reporter :
Speakers at a webinar have underscored the need for finding a mechanism to develop a bridge between the Export Development Fund (EDF) and foreign financial institutions (FFIs) for taking credit guarantee risks in cases of open account exports.
The speakers, including business leaders, bankers and academics, also expressed the concern that the country was losing competitiveness in the international market due to not having an affordable mechanism for the open account exports.
Bangladesh requires its own factoring for functioning open account exports well so that it could offer international standard services at competitive rates, they added.
The distinguished speakers said the central bank should formulate policies in this regard.
They also called for making ways of protecting the country’s exporters in open account trading as there is no way back to letter of credit for international trading.
They said there should be buyers’ credit rating as well to protect the country’s exporters.
International Chamber of Commerce-Bangladesh (ICC-B), ICC UAE and Asian Development Bank (ADB) jointly organised the webinar titled “Global Awareness on Open Account Export Transactions and Recent Policy Changes in Bangladesh” on Thursday.
President of International Chamber of Commerce Bangladesh Mahbubur Rahman said, “It is (now) open account system and we should have to continually see (that) adequate protection is there for exporters from a given country.”
He said around 85 per cent trading are now being handled by this system around the world. “We should have to go for it and we should also see that our interests are protected.”
“From that point of view, factoring and insurance are there and ICC is looking for the ways to protect traders,” he said, adding that importers have to have their credit rating so that the exporters from Bangladesh can rely on them.
He said the Covid-19 shocked the international trade and, as a result, the serious challenges of international trade transactions are being translated into disruptions and shrinkage of trade finance; the main driver of economic development.
Currently, around 70 per cent of Bangladesh’s export is conducted under preferences given by some developed and developing nations under the LDC criteria.
According to experts, export market diversification will be a major challenge for Bangladesh in the post-LDC era, he said.
