Three leading trade bodies have submitted a list of 370 textile and garment factories to Bangladesh Bank for access to a Tk 60,000 crore government-backed incentive programme aimed at helping distressed businesses recover.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) recommended 140 garment factories, while the Bangladesh Textile Mills Association (BTMA) submitted 130 textile mills. The Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) recommended another 100 factories.
The organisations said the selected factories were identified based on financial distress over the past two years, prolonged production shutdowns and difficulties in servicing loans. The lists were also verified by third parties before being finalised.
According to industry associations, around 700 textile and garment factories have been affected by political instability, labour unrest and disruptions to production and exports. The 370 recommended factories account for more than half of those affected.
The sector faced major disruptions during and after the student movement in July 2024. Following the change of government in August that year, labour unrest intensified in key industrial hubs including Savar, Ashulia, Gazipur, Narayanganj and Bhaluka.
Industry leaders said incidents of arson involving factories and cargo trucks bound for Chattogram also disrupted supply chains. Many exporters were forced to offer discounts after failing to deliver products on time, while some had to use costly air freight. Some export orders were also cancelled.
The industry has additionally been hit by domestic energy shortages and disruptions to global supply chains caused by geopolitical conflicts, exporters said. Rising production and operating costs have left many businesses struggling to return to normal operations.
Against this backdrop, Bangladesh Bank announced the Tk 60,000 crore incentive programme on May 23 to revive distressed businesses and accelerate investment. Of the total, Tk 41,000 crore will be provided through refinancing from banks’ excess liquidity, while Tk 19,000 crore will come from Bangladesh Bank’s own funds with a government guarantee.
The programme includes Tk 20,000 crore for closed factories, Tk 10,000 crore for agriculture and rural activities, and Tk 5,000 crore for micro, cottage and small and medium enterprises. Another Tk 3,000 crore each has been allocated for export diversification and the North Bengal Agriculture Hub.
The shortlisted factories will be able to apply for loans through their respective lending banks.
However, business leaders have warned that existing eligibility conditions, including requirements related to classified loans, could prevent many distressed companies from accessing the funds.
BTMA President Shaukat Aziz Russell said several conditions could become major obstacles for businesses seeking support. He also stressed that adequate gas and electricity supplies are essential for restarting factories.
BKMEA President Mohammad Hatem said the fund would help small and medium-sized factories recover, but added that restoring the entire textile and garment industry to full strength would take more time.
