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EDF Presentation

The document provides an overview of the Export Development Fund (EDF) in Bangladesh, including eligible parties, interest rates, loan tenors and limits, procedures for application, and accounting. It also discusses the current usage of EDF loans by industry and some issues regarding eligibility.

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Mohammad Mehedi Al-Suman
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110 views

EDF Presentation

The document provides an overview of the Export Development Fund (EDF) in Bangladesh, including eligible parties, interest rates, loan tenors and limits, procedures for application, and accounting. It also discusses the current usage of EDF loans by industry and some issues regarding eligibility.

Uploaded by

Mohammad Mehedi Al-Suman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Overview of EDF :

To boost up the export of non-traditional product by


facilitating access to financing in foreign exchange for
input procurements by manufacturer-exporters a
refinancing fund of USD 30 million was created with the
collaboration of IDA and Bangladesh Government in
1989 is known as EDF.

The size of EDF is USD 1.8 Billion.


Eligible parties and Interest rate of EDF :

Any manufacturer-exporters (Direct/Deemed exporter) can


avail EDF facility through AD banks.

Interest Rate :
ADs will be charged by BB @ six-month USD LIBOR+1%
Customer is charged by ADs @ six-month USD LIBOR +2.5%
EDF facility is available in two mode :

1. Import against export order


Any manufacturer-exporter can avail EDF loan against a
specific Export order upto input imports permissible limit
against an export LC/firm export contract/inland back to
back LC.

2. Bulk based import


Member mills of some exporters association are allowed to
access EDF facility for import raw materials in bulk based
without export order.
Tenor of EDF loans :

EDF loans are repayable by the ADs upon receipt of


proceeds of the relative export.

In all cases within 180 days from dates of disbursement.

Extendable by BB up to 270 days upon application


explaining the necessity of longer period for repatriation of
export proceeds.
Eligibility for EDF loans:

i) Input imports must be in full compliance with the value


addition criterion and other requirements of the government’s
Import Policy Order (IPO) and instructions laid down in the
GFET-2009 and subsequent circulars of BB.

ii) Input imports of a manufacturer-exporter defaulting in


repatriation of export proceeds within 120 days from date of
shipment, or such extension as permitted by BB will not be
eligible for financing from the EDF besides other usual
regulatory penalties.
Eligibility for EDF loans:

iii) The loans to manufacturer-exporters to be eligible for EDF


financing must be within the single borrower exposure limit.

iv) Direct exporters are allowed for EDF financing against BTB
import LCs/inland BTB LCs. Deemed exporters can avail the
facility for supply of intermediate output to the manufacturers
of the final export.
Amount of EDF loans:

1. Import Against export order


For manufacturer-exporters an EDF loan to an AD shall not
exceed i) the limit of input imports permissible against an
export LC/firm export contract/inland BTB LC under the
IPO in force, or ii) USD 15 million, whichever is lower.

2. Bulk based import

Member mills of Some permitted exporters association are


allowed to access EDF facility for import raw materials in
bulk based without export order. The next chart may be seen :
EDF loans limit for member mills of association for bulk import :

Name of the Association Limit set by BB, in USD


Bangladesh Textile Mills Association The amount in foreign exchange 15 whichever
realized against inland BTB LCs over million is lower
the past 12 months.
Bangladesh Dyed Yarn Exporters 15 whichever
Association Do million is lower
Bangladesh Garment Accessories & 2 million whichever
Packaging Manufacturers & Exporters Do is lower
Association
Bangladesh Plastic Goods The amount in foreign exchange 1 million whichever
Manufacturer and Exporters realized against inland BTB LCs and is lower
Association export LCs over the past 12 months.
Leathergoods & Footwear Estimated requirements for upto one
Manufacturers & Exporters year, based on their export
Association of Bangladesh performance over the preceding year.
Bangladesh Ceramic Wares
Manufacturers’ Association Do
Permissible Input procurement by for association:

Name of the Association Permissible Input


procurement
Raw cotton and others fibre
Bangladesh Textile Mills Association (BTMA)
Bangladesh Dyed Yarn Exporters Association Unprocessed yarn and Chemicals
(BDYEA)
Bangladesh Garment Accessories & Packaging Raw materials
Manufacturers & Exporters Association (BGAPMEA)

Bangladesh Plastic Goods Manufacturer and Raw materials


Exporters Association (BPGMEA)
Leathergoods & Footwear Manufacturers &
Exporters Association of Bangladesh (LFMEAB) -
Bangladesh Ceramic Wares Manufacturers’
Association (BCWMA) -
Procedure of application for EDF loans :
Head offices/principal offices of AD banks shall submit to FRTMD, BB
duly filled in application in Form-A after the input procurements financed
by them in foreign exchange, against which they are seeking the EDF loans.

The application, signed by two appropriately empowered officials will also


authorize BB to realize the principal and accrued interest on the EDF loans
to the ADs immediately upon expiry of the permissible periods of the loans
by debit to the FC clearing accounts of the concerned ADs with BB; unless
repaid by them earlier. Repayment advices of the ADs should be
accompanied by calculation worksheets in Form-B

Monthly statements detailing the outstanding USD loans of ADs to


customers against which EDF financing have been drawn should be
submitted in Form-C by head offices/principal offices of the AD banks by
the second week of the following month.
Accounting Procedure :

Journal

Loan to importer/Exporter Dr      XXX


Nostro A/c                                                 Cr XXX
 
Clearing A/c                       Dr      XXX
To Loan/Fund from BB                              Cr XXX
 
Balance Sheet
 
Assets
Loan to importers/Exporters       XXX
 
Liability
Loan/Fund from BB                      XXX
Present status of the use of EDF loan :

Name of the Member’s Association Uses (%)

1) BGMEA 56%
2) BTMA 21%
3) BKMEA 11%
4) Bangladesh Dyed Yarn Exporters Association 1%
5) Bangladesh Garment Accessories & Packaging 7%
Manufacturers & Exporters Association
6) Bangladesh Plastic Goods Manufacturer and Exporters 1%
Association
7) Leathergoods & Footwear Manufacturers & Exporters 1%
Association of Bangladesh
8) Bangladesh Ceramic Wares Manufacturers’ Association 1%

9) Others 1%
Total 100%
Some Issues :

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2. Bwc‡RW¯’ cÖwZôv‡b mieiv‡ni wbwgË BwWGd myweav cÖ‡hvR¨


n‡e wK bv ?

3. ‡WdvW©/BD‡RÝ wfwËK Avg`vwbi Rb¨ BwWGd myweav cÖ‡`q nq


wK bv ?

4. GKB ißvwb Av‡`‡ki wecix‡Z GKvwaK e¨vs‡Ki gva¨‡g ißvwbi †ÿ‡Î


BwWGd myweav MÖnY Kiv hv‡e wK bv?

 
EDF Related Circulars :

Year FE. Circular No. Subject


2009 25/2009 Master Circular
19/2010 Interest rate on EDF loans
2010
20/2010 Enhancement of EDF
2011 21/2011 Inclusion of ERC No. for loan from EDF
04/2013 Inclusion the name of BGAPMEA for bulk
import
13/2013 Increasing the limit of BTMA and Inclusion the
2013 name BPGMEAof for bulk import
15/2013 Interest Rate on borrowing from EDF
16/2013
26/2014 Increasing the limit of BTMA and General
Exporters to 15 million
30/2014 Increasing the limit of BGAPMEA to 1.0 million
2014
34/2014 Increasing the limit of BPGMEA to 1.0 million
35/2014 Inclusion of the name of BDYEA

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