StanChart rolls out pre-shipment loans for garment makers

Standard Chartered has partnered with large global garment buyers and suppliers and disbursed US dollar-denominated pre-shipment loans under a new finance programme, which aims to support more than 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 press release yesterday.

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The bank's clients can avail one-year liquidity support for payment of wages, utilities and other operational expenses under the programme, with a moratorium period of three months.

More than 20,000 workers received their multiple months' salaries and festival bonuses on time through these loans.

The programme enabled easy access to funds for salary and other operating expenses, and provides low-cost financing with natural hedge against currency volatility, the bank said.

In the press release, 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 can't 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."

"Standard Chartered used its 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."

"Covid-19 is something which totally left us unprepared, especially during the initial months in 2020. Ours is an industry that deals with tight deadlines, massive workers and unpredictable buyers," said M Shahadat Hossain, chairperson of Dekko Legacy Group.

He described the government's stimulus package as a big relief. The USD based pre-shipment financing also helped them manage payments. 

"We were able to reduce our expenses and 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."

Naser Ezaz Bijoy, CEO of Standard Chartered Bangladesh, thanked the central bank for the support that allowed it to offer the low interest USD-denominated loans to exporters.

"As the largest international bank in the country, with our unique global network and our relationship with buyers, we had an important role to play during this crisis."

"The RMG sector continues to be the life blood of Bangladesh's economy, and I happy and proud that our initiatives were able to support the sector in its time of need."