Export Development Fund loans can be repaid in instalments from now on

Bangladesh Bank has introduced an instalment facility to repay loans from the Export Development Fund (EDF).

From now on, the entire loan liability can be paid in three instalments, which had to be paid at once earlier.

The Foreign Exchange Policy Department (FEPD) of Bangladesh Bank issued a guideline in this regard today (September 15, 2022) and sent it to all authorized dealers engaged in foreign exchange transactions.

According to the Bangladesh Bank directive, exporters can partially repay the EDF loan liability. A maximum of two partial repayments can be made during the loan tenure.

The circular stated that the remaining liability is to be repaid in one go during the loan tenure. That means exporters can pay the entire debt in three instalments.

Sector insiders say that exporters had to face issues with the repayment at once, as export income is not available at the same time.

In such a situation, the exporters will be able to partially pay the EDF liability in instalments only after receiving the export proceeds under the new directive.

The central bank provides foreign currency support to exporters for the import of manufacturing raw materials, under EDF. The tenure of an EDF loan is 180 days. Subject to the approval of Bangladesh Bank, this period can be extended by another 90 days.

- UNB