The apex garment makers’ body in Bangladesh, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), has initiated a technical exercise to assess the existing exit or insolvency regime and practices to identify necessary reform measures so as to facilitate improvement in the country’s insolvency law or business exit regime and practices with focus on highlighting improvement relevant to entrepreneurs in the apparel manufacturing sector.
According to media reports, the garment makers’ body aims to form a working group with the participation of stakeholders — the BGMEA has, reportedly, sought participation of different stakeholders, including the National Board of Revenue (NBR), in the exercise for effective completion of the assessment — to ensure reflection of ground realities and context, and to create the necessary awareness and broad-based support for successful implementation of the recommendations that the Group will make on the policy initiative.
As per the BGMEA, due to coronavirus-induced shutdown and resultant economic downturn in the main export destinations, firms in the sector have, reportedly, come across many business hurdles, including the prospect of voluntary and involuntary exit.
Reports underline that Bangladesh is ranked 154th on resolving insolvency indicator in the overall Ease of Doing Business Report-2020 even as the report suggests that resolving insolvency takes around four years, while the recovery rate 29.1 cents on a dollar with a cost of 8 per cent of estate value.