Staff Reporter :
Four state-owned commercial banks (SoCBs) — Sonali, Janata, Agrani, Rupali — will disburse Tk 540 crore as loan this year to the tanneries for buying rawhide of the sacrificial animals during the upcoming Eid-ul-Azha festival, officials said.
Among the SoCBs, Sonali Bank will distribute Tk 140 crore, Janata Bank Tk 250 crore, Agrani Bank Tk 100 crore and Rupali Bank Tk 50 crore.
Officials of these banks, however, said those who had paid back loans that were provided last year would be given fresh loan to procure rawhides this year. A senior Sonali Bank official said his bank would give credit support to them who had repaid timely their loans given by the bank. “Those who defaulted last year would not be given any loan this year,” he added.
Out of Tk 140 crore, he said, Tk 58 crore would be disbursed ahead of Eid-ul-Azha to procure rawhide and the remaining amount would be given during the course of the year.
Last year, the state-owned four commercial banks had provided Tk 400 crore as loans to the tanners to procure rawhides.
While talking to The New Nation on Tuesday, Shaheen Ahmed, Chairman of the Bangladesh Tanners Association (BTA), said the loan amount is not enough, as rawhide worth about Tk 4,000 crore are traded on the day of Eid.
But, there is no pressure on the banks from our side to give us more loans than what they intend to, he added.
The BTA Chairman said the tanners usually procure almost 50 per cent of the total annual demand of rawhides and skins during the Eid-ul-Azha festival. Thus, the tanners have to take a good amount of loans from the country’s state-owned commercial banks ahead of the festival to meet their financial demand for procuring the rawhides.
“This year, we have targeted to procure around 70-80 lakh pieces of rawhide (cow and buffaloes) and 40-45 lakh pieces of raw skin (goats) across the country in the upcoming Eid-ul-Azha,” he added.
The tanners of the country are now facing shortage of working capital as a good number of finished leather remained stockpile following a short fall of the export order, the BTA President noted.
Apart from this, the tanners are also investing huge amount of money for relocating their tanneries from Hazaribagh to Savar Leather Industrial Estate, Shaheen Ahmed pointed out.
“The credit support which the public banks offered is not adequate as we are expecting more supply of rawhides this year from the previous Eid,” said Delwar Hossain, former general secretary of Bangladesh Hide and Skin Merchants Association.
He said that the tanners and hide merchants may not be able to procure as much as rawhide and skins they expected earlier due to inadequate credit support. “If we are unable to procure the expected rawhides during Eid, it will pave the way of smuggling of a large quantity of rawhides into the neighbouring countries,” he added.
Earlier, the central bank made a guideline on giving loans to the leather sector about five years ago. The banks have been strictly following the policy and are subsequently facing much less pressure now.
During the first two months (July-August) of the current fiscal year, an Export Promotion Bureau data shows, the country fetched $202.26 million from leather exports against the target of $238.24 million.
The government set the target at $1327.28 million for the 2014-15 fiscal. Bangladesh earned $1124.17 million from leather exports in the last fiscal.
