Three prominent textile and apparel organizations in Bangladesh have officially recommended 370 closed and struggling production units to the central bank for financial assistance. These recommendations are part of the government’s broader Tk 60,000 crore economic stimulus package designed to stabilize the industrial sector. The Bangladesh Garment Manufacturers and Exporters Association submitted 140 garment factories, while the Bangladesh Textile Mills Association proposed 130 mills across the spinning, weaving, and dyeing sectors. Additionally, the Bangladesh Knitwear Manufacturers and Exporters Association put forward 100 factories for consideration.
These apparel trade bodies confirmed that the selected units represent over half of the nearly 700 facilities currently facing financial distress or closure. The industry has been significantly impacted by political instability, labor unrest, and operational disruptions over the preceding two years. To maintain the integrity of the selection, the organizations utilized third-party verification and audits before finalizing the list. This ensures that the Bangladesh garment stimulus is directed toward the most qualified recipients who have experienced prolonged shutdowns or severe financial deterioration.
Support for Distressed Textile and Garment Units
The manufacturing sector encountered substantial setbacks following political transitions and widespread labor unrest in major industrial belts such as Savar, Ashulia, and Gazipur. These regions house more than 60 percent of the nation’s textile and garment infrastructure. Supply chain disruptions, including the burning of goods-laden transport and factory interruptions, forced many exporters to absorb order cancellations and utilize expensive air freight. Consequently, the factory recovery fund is viewed as a necessary tool to address these accumulated losses and help factories resume regular operations.
The economic stimulus package was introduced on May 23 to accelerate recovery and revive investment. It consists of a Tk 41,000 crore refinancing fund alongside a Tk 19,000 crore fund supported by central bank resources and government guarantees. Within this structure, a dedicated Bangladesh Bank fund of Tk 20,000 crore has been specifically earmarked for closed factories. Other segments of the package focus on agriculture, small enterprises, and export diversification.
Strategic Allocation of the Recovery Fund
The distribution of textile industry loans will be managed through lien banks, which are responsible for processing applications in coordination with the central bank. While the Bangladesh garment stimulus offers a vital lifeline, industry leaders have voiced concerns regarding the accessibility of the funds. Stringent eligibility criteria, particularly those involving classified loans, may prevent some distressed mills from qualifying for the necessary capital.
Furthermore, representatives from the apparel trade bodies emphasized that the factory recovery fund must be accompanied by consistent utility supplies to be fully effective. The ongoing domestic energy crisis and global geopolitical conflicts have compounded the industry’s challenges. While the Bangladesh Bank fund is expected to assist small and medium-sized factories in settling overdue obligations, industry experts suggest that a complete restoration of the sector’s health will require a sustained effort over time. The textile industry loans remain a critical component of the strategy to protect the workforce and maintain the country’s position in the global supply chain.
