• Thursday, Jul 07, 2022
  • Last Update : 04:24 pm

Tanners rule out purchasing rawhide with bank loans

  • Published at 07:48 pm July 13th, 2021
File photo of a tannery in Dhaka Mehedi Hasan/Dhaka Tribune

Several banks receive lower fund injection than 2020, thanks to dismal disbursement figures

Similar to last year, banks are ready with a total of Tk583.09 crore for lending to tanners and rawhide merchants, who traditionally use the money to purchase rawhide from seasonal traders.

But after experiencing how little banks were willing to disburse last year, many merchants this year are opting to use their own funds to purchase rawhide.

They have been given the opportunity to reschedule their previous defaulted loans with a 2% down payment, but they are not satisfied with that decision either. 

Tanners are now demanding fresh loans without repaying the old ones.

According to Bangladesh Bank sources, the government has already instructed the central bank to set up a loan fund for leather traders. 

This year, a total of nine banks, including four state-owned banks, have fixed their loan amounts, which amount to Tk583.09 crore.

But this is less than last year's allocation of Tk644.5 crore, while disbursement from the same year was dismal, as merchants received only Tk65.01 crore.

Shakhawat Ullah, general secretary of Bangladesh Tanners Association, said that tanners were simply uninterested in applying for loans to purchase rawhide this year.

Also Read - Rawhide prices likely in 2 stages to curb price infighting

In an interview with the Dhaka Tribune, he said: "The government, like everyone else, has given us [tanners] the facility to reschedule loans with a 2% downpayment. But not too many traders could take that opportunity. 

“Therefore, we have requested the Financial Institutions Department of the Ministry of Finance and the Bangladesh Bank to give new loan opportunities without considering the previous loans, especially considering the Covid-19 pandemic," he added.

"Of course, we are prepared to buy as much rawhide as we can with our own money," he further said.

According to Bangladesh Bank, Agrani Bank had received Tk180 crore last year for rawhide loans, but it could disburse only Tk20.65 crore. 

This year, the bank has been allocated Tk120 crore to lend to this sector. 

Rupali Bank had received Tk155 crore for last year, but could only lend Tk11 crore. 

However, this year they received Tk227 crore for lending to tanners. 

On the other hand, Janata Bank had been allocated Tk100 crore last year. But no loans were disbursed. This time, the bank has received Tk140 crore. 

Sonali Bank had received Tk71 crore last year for lending to tanners, but lent only Tk20.15 crore. This year, the bank received Tk25 crore for the provision. 

Allocation for private banks

Among private commercial banks, Islami Bank Bangladesh Ltd had given loans amounting to Tk12.21 crore against the allocation of Tk50 crore last year. 

This time the bank has received Tk66.75 crore for disbursement. 

Also Read - Rawhide of sacrificial animals: Four SoCBs to lend Tk585cr

Al Arafah Islami Bank lent only Tk1 crore against an allocation of Tk60 crore last year. This time the bank has received only Tk1.09 crore as allocation. 

Besides, Basic Bank could not disburse a single loan last year despite being allocated Tk3 crore. 

This year, the bank has not been considered for lending to tanners and rawhide merchants. 

Dhaka Bank and Prime Bank respectively received Tk50 crore and Tk50 lakh for lending to tanners, but could not disburse any of it. This year they were not considered.

Three new banks have received funds for lending to tanners this year.

Krishi Bank received Tk2.5 crore, while NCC Bank got Tk50 lakh and City Bank Ltd got Tk25 lakh for the leather sector this year.

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