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Editorial

Bad practices lead to leather sector decay

Settle tannery owners’ outstanding loan immediately


Bangladeshpost
Published : 24 Jul 2021 10:14 PM | Updated : 25 Jul 2021 12:18 AM

We think the government will take an initiative so that the amount of default loan in the country’s tannery sector will not rise further.

As reported by this daily on Saturday, the total amount of default loan in the country’s tannery sector now stands at Tk 4000 crore.  Payment irregularities and long standing bad practice in repayment of bank loans by the tanners are mainly responsible for the decay of the country’s leather sector.

When Prime Minister Sheikh Hasina plans to setup two more leather industrial estates in Rajshahi and Chittagong divisions to flourish the sector with a hope to bag $ 5 billion export earnings from the leather, leather goods and footwear sector out of the total export earnings of $60 billion, mismanagement, disbursement of loans without proper justification and excess loan taken by tannery owners are mainly blamed for Tk. 4000 crore of defaulted loans in the tannery sector.


The owners of the leather industries must 

reschedule the loan within the time frame 

in order to continue their business smoothly


The old loan disbursed in the leather sector from four state-owned banks is Tk 5,344 crore while the defaulted amount is Tk 4000 crore.  To this end, we think the Bangladesh Bank (BB) will remove all sorts of irregularities and mismanagement in loan disbursement among the tanners immediately. If the loan is disbursed properly, only then the real owners will be benefitted; otherwise government’s all efforts will go in vain.    

The central bank has already extended time of loan rescheduling for leather industries, relocated at Tannery Industrial Estate in Savar, under a special facility till September 30, 2021. Therefore, the owners of the leather industries must reschedule the loan within the time frame in order to continue their business smoothly.  

It is worth mentioning that our leather, leather goods and footwear can bring better business opportunities for the country as the leather industry here is entirely independent. 

We believe  rapid development and modernisation of our leather sector can help the country become a global leader in the leather industry. However, it is encouraging to note that the government has already created a road map to take full advantage of this opportunity and enhance its export as it believes Bangladesh will be the next global sourcing hub for leather goods.