$600 million taken in loans from Export Development Fund defaulted

Loans amounting to nearly $600 million or Tk 7,000 crore disbursed from the Export Development Fund (EDF), which was formed based on the fund from the country's foreign exchange reserves, have been defaulted, according to a Bangladesh Bank document. 

Firms based in Dhaka defaulted most of the amount at $558.7 million.

Chattogram-based firms did not return $29.7 million, the BB data shows. 

Among Dhaka's top 20 entities that defaulted on these loans are Crescent Group's Remex Footwear defaulted $64.7 million and its other concern Crescent Leather Products of $58.1 million and Rupali Composite $51.7 million.

Bismillah Group's Alfah Composite defaulted $58.1 million and Bismillah Towels $ 41.million and Hindulawali Textile $14.5 million, according to data by the Bangladesh Bank.

And due to weak control, the BB could not create any pressure to realise the loans, which is necessary at a time when Bangladesh's foreign exchange reserves have been falling, deepening pressure on the country's external account.

Bangladesh Bank Executive Director and Spokesperson Md Mezbaul Haque could not be reached immediately for comments.

Among other firms that defaulted in repaying loans, Linne Fashion did not repay $32.5 million and SB Exim defaulted $31.7 million. 

MS SQ Classic defaulted on repayment of $27.3 million and International Knitwear and Apparel had overdue loans of $25.2 million. 

ESS ES Fashion had overdue loans of $25.2 million taken from the EDF formed by the central bank in 1989 from foreign exchange reserves to provide low-interest loans to the exporters to import raw materials. 

After the coronavirus pandemic, the size of the EDF was $3.5 billion until April 2020. Later, it was hiked to $7 billion in phases. 

Earlier, the BB used to disclose the amount of reserve adding the amount of loans disbursed from the EDF.

However, from July 2023, it published information regarding reserves as per a calculation method of the International Monetary Fund (IMF).

At the end of July this year, Bangladesh's forex reserves were $20.48 billion, down from $23.30 billion a year ago, showed the BB data.