The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has called on the Government to release Taka 500 crore in outstanding export incentives to support small and medium enterprises (SMEs) in meeting their obligations to workers ahead of the upcoming Eid-ul-Fitr celebrations.
Following discussions with finance ministry officials at the secretariat in Dhaka, BGMEA Administrator Anwar Hossain reported that the ministry has agreed in principle to expedite the release of Taka 325 crore. He emphasised the need for the banking division to refrain from offsetting these incentives against bank loans before the Eid payments, as SMEs are currently grappling with financial constraints due to a sluggish economy.
To assist garment exporters, the Finance Ministry and the central bank recently disbursed Taka 2,000 crore in cash incentives based on export receipts. Hossain remarked that this year’s Eid presents unique challenges regarding salary payments.
Factories are required to cover salaries for February, half of March’s salary, and the full Eid-ul-Fitr bonus. Despite poor business performance, operational expenses remain high, Hossain added.
In a recent directive, the labour and employment ministry mandated that all arrears, salaries, and bonuses be settled by the 20th of Ramadan. According to BGMEA assessments and intelligence reports, around 150 factories are currently in a precarious position concerning worker payments as Eid approaches.
However, Hossain indicated that the BGMEA and relevant banks are actively addressing these financial challenges. The recent infusion of cash incentives has significantly alleviated the situation, and efforts are now focused on resolving the issues faced by 42 specific factories. He expressed optimism that the forthcoming release of Taka 325 crore would help mitigate the major financial difficulties experienced by these establishments.
Ultimately, he noted, only three to four factories may continue to struggle due to severe financial distress. This year has seen many garment factories either close or temporarily suspend operations, largely as a result of political and labor unrest following last year’s political transition.
