FE Report

The central bank has raised the single borrowers' limit for export development fund (EDF) to US$2.0 million from $1.5 million to meet the growing demand of the country's exporters.

"We've increased the limit of EDF aiming to facilitate the country's exports," a senior official of the Bangladesh Bank (BB) told the FE Monday, adding that the new measure came into effect from July 1 last.

The central bank has issued a circular in this connection recently and asked chief executives of all scheduled banks to follow the new instructions for sanctioning loans under the EDF scheme.

Under the new directive, any individual exporter will be allowed to borrow $2.0 million instead of $1.5 million to import materials for producing export items, according to the BB circular.

On November 1, 2007, the central bank raised allocation of EDF to $150 million from $100 million earlier.

"The BB will provide sufficient funds under the EDF scheme, if necessary," another BB official said, adding that the central bank could invest around $94 million under the scheme.

Country's apparel exporters welcomed the BB's latest move saying that the new measure would help export businesses retain their position in the global market.

"It will help the country's exporters meet their short term liquidity support," President of the Bangladesh Garment Manufactures and Exporters Association (BGMEA) Abdus Salam Murshedy told the FE.

He also said the BGMEA will request the central bank to simplify its procedures for giving such funds to the exporters.

On May 31 last, the BGMEA requested the central bank to increase the amount of EDF to $300 million from the existing $150 million to facilitate the export businesses.