Business Desk :
Tanners will receive Tk 583 crore as short-term loans from banks on the occasion of the upcoming Eid-ul-Azha to purchase rawhides. Five state and three privately owned banks will disburse the loans.
According to state-owned bank sources, Rupali Bank has decided to give Tk 227 crore, Janata Bank Tk 140 crore, Agrani Bank Tk 120 crore, Sonali Bank Tk 25 crore and Bangladesh Krishi Bank Tk 2.5 crore to tanners as loans this Eid for buying rawhides of sacrificial animals.
Among the privately owned banks, Islami Bank Bangladesh will lend the tanners Tk 67 crore, Al-Arafah Islami Bank Tk 1.9 crore, National Credit and Commerce Bank Tk 50 lakh and City Bank Tk 20 lakh.
Despite banks setting loan targets every year for the purchase of hides of sacrificial animals, these targets remain unmet. Bank authorities say they have reduced loan disbursement in this sector because of a decline in loan collection.
A recent report on loan disbursement in the leather sector shows that in 2020, banks disbursed Tk 65 crore to rawhide traders on the occasion of Eid-ul-Azha despite a decision of lending Tk 644 crore. Of the amount, state-owned Janata Bank decided to lend Tk 100 crore but disbursed not a single taka. Meanwhile, Agrani Bank disbursed Tk 20 crore only, against a decision of lending Tk 180 crore. Similarly, Rupali Bank disbursed Tk 11 crore against a target of Tk 155 crore. However, Sonali Bank met its loan disbursement target of Tk 71 crore last Eid-ul-Azha.
On the other hand, Islami Bank among the privately-owned banks disbursed Tk 12 crore against its target of lending Tk 50 crore, while Al-Arafah Islami Bank lent Tk 1 crore against its Tk 80 crore target to traders for buying rawhides.
According to Bangladesh Tanners’ Association (BTA), the loan for rawhide purchase is provided for one year and only those who repay their loans of the previous year receive it the next time.
Tanners say their businesses have not been in a good state since after 2017, resulting in many of them being enlisted as loan defaulters. According to them, one of the reasons behind this is the relocation of the tannery industry to Savar.
They also said most of the loans disbursed in the past few years were being rescheduled, which is why tanners are still unable to overcome their losses.
The association general secretary Shakawat Ullah said that banks fix targets to lend money to tanners, but those targets only remain on papers. Tanners do not get the loans they expect.
“Banks adjust the amount of lent money with the previous year’s loan by rescheduling, which is why tannery owners have not been getting the disbursed money for the last few years,” he said.
“There were not many defaulters in this sector before 2017,” he said, “But many tanners did not have the financial ability to relocate their businesses to Savar and resume production there. Therefore, we demand the government to waive the interest on the loans of the years 2017 to 2019.”
Shakawat also asked the government to ask the banks not to reschedule previous loans and disburse this year’s loans anew, even if they decided to lower their targets this time.
