Bangladesh will set up a Tk10,000-crore Jute Sector Development Fund (JSDF) and the textiles and jute ministry has finalized a draft policy for low-cost loans from that fund. The management of the 20-year revolving fund will be under the central bank. A committee headed by Bangladesh Jute Mills Corporation (BJMC) chairman Mohammad Mahmudul Hassan prepared the draft.
Jute farmers, traders, entrepreneurs and exporters of jute and jute products are eligible for loans from the fund at a 5 per cent interest rate at the most — 2 per cent to cover the operational costs of the Bangladesh Bank and a 3 per cent margin of profit for the commercial banks disbursing the loans, according to newspaper reports in the country
A budgetary allocation will provide the funds at a single go or in phases.
BJMC director Shahed Sobur, also a member of the committee, said technology needs to be upgraded and jute sector exporters should get more low-rate loans as they use local sources for raw materials.
Exporters of readymade garment, knitwear, textiles, plastic, leather and ceramic get special government incentives but there is no such facility for the ailing jute and jute products industry.
Bangladesh primarily exports jute and jute products to India, China, Nepal, Germany, Korea, Brazil, Russia, Vietnam, Ivory Coast, the United States, the United Kingdom, Iraq and Iran.
In the last fiscal, Bangladesh earned over a billion dollars from the export of jute and jute products.
Around 200,000 people in Bangladesh work at 176 public and private mills, which process two-thirds of the country’s annual jute production of 1.4 million tons, according to the Bangladesh Jute Spinners Association. Of the total production, 836,000 tons are exported while the rest is consumed locally.
