Dhaka, Bangladesh (BBN)- The central bank of Bangladesh has extended its refinancing scheme for green industries to bring three more products under its easy loan facilities including the readymade garment (RMG) factories which require finance for improving workers’ safety and standard of workplaces.
An owner of RMG factory can borrow up to BDT 10 million loan from commercial banks or non-banking financial institutions (NBFIs) under the refinancing scheme of the central bank, according to a circular, issued by the Bangladesh Bank (BB) on Tuesday.
The interest RMG factory owner, however, will be a member of any of the trade bodies including Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Bangladesh Textile Mills Association (BTMA).
The credit would be given only to cover the expenses for importing gears and other stuff for safety and standard and the cost of installation and related civil work.
Besides the apparel sector, a solar-powered water treatment project for purifying surface water and a green industry will be given BDT 30 million and BDT 200 million respectively under the refinancing scheme.
An individual, a group of beneficiaries or a cooperative and organisation registered with the Registrar of Joint Stock Companies and Firms (RJSCF) can get the loan for water treatment project. The microfinance institutions (MFIs) under the Microcredit Regulatory Authority (MRA) are also eligible for this credit support.
For getting loan to set up green industries, entrepreneurs should ensure the best use of natural resources including sunlight, air, water and energy efficient technologies besides the safety of the workers and the standard of the workplaces, the BB said.
The central bank also said that the green industry should be certified by the US Green Building Council (USGBC) or by the Leadership in Energy and Environmental Design (LEED) until the government develops a guideline and issue a directive regarding the matter.
Like other sectors under the refinancing scheme, the interest rate for the credit to the three new products will be 9.0 percent per year.
The entire loan amount for RMG factory is repayable in five years, for green industries six years and for solar-powered water treatment 10 years. All the borrowers of the three areas will get nine-month grace period, but the loan must be paid in equal quarterly installments.
BBN/SSR/AD-20Aug14-1:30 pm (BST)