BB funds get costlier for exporters

The Bangladesh Bank has raised the interest rate for the loans secured from the Export Facilitation Pre-finance Fund (EFPF) and the refinance scheme for pre-shipment credit as part of its efforts to make rates market-based.

Customers will avail loans from the EFPF at a 5 percent interest rate, up from 4 percent previously, said the BB in a notice yesterday.

Banks will pay a 2 percent interest instead 1.5 percent to borrow funds from the central bank.

In January, the BB introduced the Tk 10,000-crore EFPF in order to help exporters revive their businesses. Exporters will have to use the funds to import raw materials.

The interest rate of pre-shipment credit increased to 5 percent from 3.5 per cent at the end-borrower level, the central bank said in a separate notice.

Banks can receive funds at a 2 per cent interest rate, which was 0.5 percent previously.

The pre-shipment credit is a loan granted to an exporter for financing the purchase, processing, manufacturing or packing of goods prior to shipment.

In June, the BB introduced the market-driven lending rate for banks and non-banking financial institutions, replacing the 9 per cent lending rate cap that had been in place since April 2020.