StanChart rolls out pre-shipment loans for Bangladesh’s garment makers
Standard Chartered has partnered with large global garment buyers and suppliers and disbursed American dollar denominated pre-shipment loans under a new finance programme, which aims to support over 20,000 apparel workers in Bangladesh.
The unique Covid-19 response finance programme was designed through consultation with renowned buyers, enabling enhanced liquidity support for clients in a challenging environment, the bank said in a statement today.
The bank's clients can avail one-year liquidity support for payment of wages, utilities and other operational expenses under this programme, with a moratorium period of 3 months.
More than 20,000 workers received their multiple months salaries and festival bonuses on time through these loans.
The finance programme enabled easy access to funds for salary and other operating expenses and it provides low-cost financing with natural hedge against currency volatility, the bank said.
Fakir Kamruzzaman Nahid, managing director of Fakir Fashions Ltd, a recipient of the financing, said: "The impact of the pandemic on the lives, livelihoods and the overall economy cannot be overstated."
"At a time like this, the USD based pre-shipment loans introduced by Standard Chartered offered us a chance to reduce our financial expenses as well as cement our longstanding relationship with our buyer," he added.
"Standard Chartered used their network's strength to collaborate with our major buyers and gave us this low-cost USD funding, with the flexible option to repay over a year with moratorium. During this pandemic, the promptness, efficiency and commendable effort of the Standard Chartered team has proven that the bank understands the requirements of our industry."
M Shahadat Hossain, chairperson of Dekko Legacy Group, another beneficiary of the facility, said: "The Covid-19 is something which totally left us unprepared, especially during the initial months in 2020. Ours is an industry, which deals with tight deadlines, massive workers and unpredictable buyers."
"So when we received support from the government's stimulus package, it was a big relief. The USD based pre-shipment financing also helped us to manage payments beyond the period government has supported. We were able to reduce our financial expenses as well as create an additional support in the cashflow."
This was a very innovative initiative by Standard Chartered, Hossain said.
"Also, the way it is structured, with the moratorium, gives us more flexibility. I want to sincerely thank the Standard Chartered team for coming forward during this stressful time."
Naser Ezaz Bijoy, CEO of Standard Chartered Bangladesh, said: "Standard Chartered prides itself on the Here for Good promise, and there has never been a more important time to deliver on that promise."
"I am extremely grateful for the timely support we got from Bangladesh Bank to offer these low interest USD denominated loans to our exporter clients."