Bangladesh's BGMEA seeks urgent banking support for RMG units

Nearly 400 RMG factories have shut down over the past year due to rising production costs, falling product prices and a drop in orders, the trade body said in a press release.

Many more factories continue to be vulnerable with weakening export performance, it noted.

Small and medium enterprises (SMEs) are facing the most severe pressure and may fail to pay workers' wages and festival allowances on time, potentially triggering unrest in the sector, it said.

Garment exports dropped by 2.43 per cent year on year (YoY) during the first seven months of this fiscal. Such exports declined by an average of 9.43 per cent YoY during October-December last year.

The number of working days in February and March will sharply drop due to the national election, public holidays and the Islamic festival of Eid-ul-Fitr. Although factories may operate for only 35 out of 60 days, they will be required to pay nearly double wages in March, including regular salaries, bonuses and advance payments.

To address the situation, BGMEA urged authorities to expedite the disbursement of pending cash support currently under way with lien banks and the Bangladesh Bank.

The association also called for soft loans equivalent to six months' wages to help factories meet salary, bonus and allowance payments, domestic media outlets reported.

Fibre2Fashion News Desk (DS)