A Bangladesh Bank (BB) document reports that loans totalling around Taka 7,000 crore, or nearly US $ 600 million, that were disbursed from the Export Development Fund (EDF), which was established based on the nation’s foreign exchange reserves, have defaulted.
Dhaka-based companies defaulted on US $ 558.7 million of the total sum. Furthermore, according to BB data, Chittagong-based businesses did not repay US $ 29.7 million.
The Crescent Group’s Rimex Footwear, valued at US $ 64.7 million, Crescent Leather Products, its other business, valued at US $ 58.1 million, and Rupali Composite Leatherwear, valued at US $ 51.7 million, are among the top 20 companies in Dhaka that missed payments on these loans.
The central bank’s data indicates that Alppa Composite Towels Ltd, Bismillah Towels Ltd, and Hindulwali Textile, all owned by the Bismillah Group, defaulted on US $ 58.1 million, US $ 41.4 million, and US $ 14.5 million respectively.
And due to weak control, the BB could not create any pressure to realise the loans even though 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 for comment.
Among other firms that defaulted in repaying loans, Lenny Fashions did not repay US $ 32.5 million and SB Exim Bangladesh defaulted on US $ 31.7 million. MS SQ Celsius Ltd defaulted on repayment of US $ 27.3 million and International Knitwear and Apparel had overdue loans of US $ 25.2 million.
Esses Fashions, a concern of Beximco, had overdue loans of US $ 24.4 million taken from the EDF formed by the central bank in 1989 to provide low-interest loans to exporters and import raw materials.
After the coronavirus pandemic, the size of the EDF was US $ 3.5 billion until April 2020. Later, it was hiked to US $ 7 billion in phases.
The amount of reserves plus the total number of loans disbursed from the EDF was previously disclosed by the BB. However, starting in July 2023, it released data on reserves using the International Monetary Fund’s (IMF) methodology of computation.
Bextex Garment, a Beximco company, is one of the remaining top 20 Dhaka-based businesses with past-due loans of between US $ 9 million and US $ 24 million.
Another is Crescent Group, which is involved in several different businesses, such as real estate, textiles, and leather. The Bangladesh Financial Intelligence Unit and the Anti-misconduct Commission have previously accused the corporation of serious misconduct. It is also accused of laundering large sums of money through fraudulent export-import transactions.
Likewise, Bismillah Group, owner of Bismillah Towels Ltd, has become infamous for its involvement in corruption and money laundering scandals in the country.
