Dhaka, Bangladesh (BBN) – Credit flow to tanners for the purchase of raw hides of sacrificial animals during the upcoming Eid-ul-Azha festival may be affected following Anthrax outbreak in different parts of Bangladesh.

Tanners are fearful that the repayment of current loans, provided by state-owned commercial banks (SCBs) to buy rawhide during the last year’s Eid-ul-Azha festival, could hit snags as the fallout of the disease. The government had to issue the nationwide red alert following reports of Anthrax outbreak in a number of districts.

Bankers said last year, four SCBs extended over BDT 4.0 billion in loans to tanners to help them procure raw hides.

“Some parties may fail to repay their loans in time as their businesses were hurt as a result of the anthrax fallout,” Bangladesh Tanners’ Association Chairman Shaheen Ahmed said.

“Over 220 million square feet of leather are processed each year, more than one-third comes from the sacrificial animals,” Mr. Ahmed was quoted by the Financial Express (FE), a local newspaper, as saying.

The state banks, officials said, will follow the similar guideline while providing loans for the purchase of raw hide of sacrificial animals during this year’s Eid-ul-Azha festival.

Only parties, who have already repaid their debts, will be eligible for fresh loans, while defaulting parties will not be entitled to fresh credits.

“We’ll take the final decision on the disbursement criteria of fresh loans for purchasing raw hides of sacrificial animals after consultation with the board, the government and the central bank,” Chief Executive Officer (CEO) and Managing Director of Janata Bank Limited S.M. Aminur Rahman told the FE.

Meanwhile, a meeting of the Leather Council is scheduled to be held in the commerce ministry Sunday to review the overall situation in the leather industry, a SCB senior official said.

“We’ll discuss issues including loan disbursement strategy in the meeting,” the SCB official said, adding that all SCBs are trying to recover their loans.

On Thursday, the government withdrew the red-alert but asked the officials concerned to remain on alert to prevent the possible further outbreak.

Anthrax is a highly contagious disease, usually transmitted to people through contact with meat, blood or skin of an animal that has been infected.

BBN/SSR/SI-09Oct10-10:08 am (BST)