Jute farmers to get loans at 4.0pc interest rate
Policy for Tk 100b dev fund underway
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Textiles and jute ministry has decided to offer loans at 4.0 per cent interest rate to farmers, officials said.
The loans will be disbursed from the proposed Tk 100 billion Jute Sector Development Fund (JSDF).
The ministry made the decision a recent meeting to make a draft policy for the JSDF.
Earlier, a six-member committee, led by Bangladesh Jute Mills Corporation (BJMC) chairman Mahmudul Hassan, proposed the rate at 5.0 per cent.
A senior official of the ministry told the FE that timely as well as effective assistance is needed to help the sector regain its past glory.
"Our meeting has decided to persuade the government to grant loans at cheapest rate," he said.
Rezaul Quader, additional secretary, on Friday said the committee will now recast the policy in line with the decisions made at the meeting.
"Later, we'll sit with the finance ministry to discuss the draft policy and the formation of the proposed fund," he told the FE.
As to whether the government agrees to pay Tk 100 billion at one go, he said, the fund will primarily be formed with a significant amount.
The size of the fund will be increased to its targeted amount in phases, Mr Quader said.
"As the government wants to restore the golden fibre's glory by giving necessary support, such a big amount will be needed," said another official.
Jute and jute goods were once the top foreign currency earners for Bangladesh.
But the position is misplaced with the fall of jute production and closure of a fair number of state-owned jute mills.
However, jute production has grown significantly in recent years, thus showing a positive note.
In fiscal year 2016-17, the sector earned over a billion dollars by exporting jute and jute goods.
In the meantime, the government has taken multiple measures to help regain the lost glory of jute.
Officials said jute growers, traders, millers and exporters will be eligible for concessional loans.
The fund will be formed for a period of 20 years.
A senior BJMC official said Export Development Fund (EDF) provides low-cost loans for readymade garments, textiles, plastic, leather and ceramics.
The government set up the fund in 1989 to help export-oriented industries by disbursing soft loans.
However, jute sector was not given scope to get loans from the EDF.
Bangladesh exports jute and jute goods to Korea, India, Germany, China, Nepal, Brazil, Russia, the US, the UK, Iraq and Iran.