9 industrial groups seek interest-free loans from govt

Following the government’s financial assistance to Beximco Group for paying workers of its closed factories, a wave of similar requests has reached the Ministry of Labour and Employment. In recent months, nine companies have newly applied for interest-free loans from the government.

The companies are Deshbandhu Group, Jamuna Group, IFAD Group, Rangs Group, Nightingale Fashion, TNZ Group, RH Denim & Recycling Composite, Faiyaz Composite, and JS Link. These firms approached the Ministry of Labour and Employment in August, September, and October seeking financial support. Additionally, an earlier loan request from Nassa Group remains pending with the ministry.

Some of the companies applied for funds to pay regular wages and allowances to workers and employees, others to clear arrears and bonuses, while a few sought help to restart closed factories. The ministry has already written to Bangladesh Bank and the Financial Institutions Division of the Ministry of Finance on behalf of eight companies to facilitate financial assistance. Collectively, these firms have requested around Tk 70 billion (7,000 crore) in government support.

Asked about the matter, Bangladesh Bank Governor Ahsan H Mansur told Prothom Alo, “At this stage, the demands of these companies do not seem justified. However, if there are logical grounds, policy support may be considered—but nothing beyond that.”

Ahsan H Mansur thinks such applications have increased after the government extended loan support to Beximco Group.

In February this year, the government provided Tk 5.25 billion (525 crore) to Beximco Group to settle dues of its workers and employees — Tk 3.26 billion (325.46 crore) from the Finance Ministry and Tk 2 billion (200 crore) from the Central Fund under the Labour and Employment Ministry. Over the past two years, the government has disbursed around Tk 7.07 billion (707 crore) in loans to 12 companies, including Beximco, to ease labour unrest in the garment sector.

In September, Deshbandhu Group applied to the government for Tk 20 billion (2,000 crore) in working capital and loan rescheduling facilities. The Labour and Employment Ministry has requested Bangladesh Bank to take necessary measures.

In a letter to the governor, the ministry wrote that since 1989, Deshbandhu Group has contributed to the national economy by establishing large and medium industries in remote areas, creating 25,000 jobs. However, due to a shortage of raw materials and working capital, several of its factories have closed, while five are operating at only 25 per cent capacity. To resolve labour unrest and keep the factories running, the ministry urged Bangladesh Bank to provide working capital and back-to-back LC facilities.

Jamuna Group has requested Tk 30 billion (3,000 crore) in assistance from the Labour Ministry. The group is seeking an interest-free incentive loan for five years with a six-month grace period. Among all the applicants, Jamuna Group has sought the largest amount.

It says the money is needed to pay workers’ wages and allowances, utility bills, and costs for essential raw materials at its seven export-oriented units.

When contacted, Sumaiya Islam, director of Jamuna Group, told Prothom Alo that she could not comment on the matter.

On 16 October, Rangs Group applied to the Labour Adviser seeking assistance, citing fears of potential labour unrest. The group sought Tk 7.5 billion (750 crore) in support to pay regular wages to its 5,000 workers and employees and to continue production operations. It applied for a seven-year, interest-free loan with a one-year grace period.

In its application, Rangs Group said it is under severe financial pressure due to global economic volatility, political instability, and disruptions to the import-export environment. During the political unrest in July last year, factories across the country were shut down. At that time, the group had to take high-interest bank loans to pay workers on humanitarian grounds, putting further financial stress on the company.

When contacted, Rangs Group Adviser Sadrul Islam said, “We have sought government support, and we hope the government will consider our request positively.”

Since 1985, IFAD Autos, a concern of IFAD Group, has been marketing various models of AC and non-AC buses, trucks, and covered vans of the Ashok Leyland brand in Bangladesh. In 2017, the company began assembling vehicles locally in Dhamrai, Dhaka, with technical assistance from Ashok Leyland, marking it as the country’s largest commercial vehicle plant in the private sector.

On 11 September, the company applied to the government for an interest-free loan of Tk 8.5 billion (850 crore), stating that the fund is needed to pay workers’ regular wages and to keep the factory operational.

TNZ Group has sought Tk 400 million (40 crore) in financial support, offering to mortgage a seven-story building in Mohakhali, Dhaka. The group says it will use the funds to clear workers’ outstanding dues.

According to Labour Ministry sources, the government has already provided funds to TNZ Group before. On 28 November last year, the Finance Division granted Tk 100 million (10 crore), and the Central Fund under the Labour Ministry provided another Tk 60 million (6 crore) on the same day. On 28 May this year, the group received an additional Tk 220 million (22 crore). In total, the government has already given Tk 380 million (38 crore) in loan support to TNZ Group.

Reportedly, Shahadat Hossain Shamim, the main director of TNZ Group, has left the country. Another director, Shariful Shaheen, earlier told Prothom Alo that they had even tried to sell the group’s washing plant and the owner’s Dhaka residence to repay dues.

Nightingale Fashion, a 100-pc- export-oriented factory, has requested Tk 5 billion (500 crore) in interest-free loans to restart its closed factory. The company offered land and buildings in Gazipur—a seven-story structure on three plots totalling 21,500 sqft, along with 60 bighas of land—as collateral. The group said the support would help both restart operations and clear arrears of workers.

Managing Director Abdul Salam of Nightingale Fashion told Prothom Alo that his factory once employed 4,000 workers and employees, and exports had been strong. However, the factory shut down due to a lack of cooperation from banks. He said they now hope to make a comeback with government assistance.

In addition, RH Denim and Recycling Composite sought Tk 500 million (50 crore), Faiyaz Composite Tk 300 million (30 crore), and JS Link Tk 500 million (50 crore) in government loans.

Asked about the matter, Labour Secretary Sanoar Jahan Bhuiyan told Prothom Alo that the government itself does not provide loans. It is true that workers are sometimes assisted through the Central Fund. The loan applications started coming after Beximco received support, but other companies cannot be directly compared to Beximco.

Replying to a query about whether the companies would have applied if they were not in crisis, the labour secretary said, “That’s true. If anything can be done now, it is up to Bangladesh Bank.”