Apparel sector yet to get concessionary COVID-19 funding from banks: JAAF

Monday, 8 June 2020 03:05 - - {{hitsCtrl.values.hits}}

Despite the announcement made by the Government, the apparel sector is yet to receive the concessionary loan from the banks under the emergency COVID refinance scheme towards payment of the employees’ basic wage for the months of April to June, industry sources said.The industry had made a request to the Government to support them with short term funding to meet basic overheads such as payment of 50% of the salary per month for two months to those who are not able to come to work to factories that employ less than 3,000 at 4% interest. A request was also made for the deferment of EPF/ETF payments as well.

Upon inquiry, the Joint Apparel Associations Forum (JAAF) has been informed that none of the companies have received the said loans expected to have been released by the Government through the Central Bank, according to Secretary General Tuli Cooray.

Further, there has been no support even from the utility service providers, though the Government announced it.

“If these promised relief had come at least now, it would have been a kind of “Life Support” to these SME factories. We need this support now in order to avoid a total collapse,” JAAF Secretary General Cooray added.

The industry strongly believes that the refinancing package of Rs. 50 billion offered by the Central Bank is grossly inadequate to meet the demands of all sectors including that of the apparel industry.

“Noting the developments that are taking place in other competing countries, we believe that the Central Bank is required to come up with a stimulus package of at least Rs. 150 billion,” he said. The Cabinet last week however decided to increase the amount of Central Bank refinance scheme to Rs. 150 billion from Rs. 50 billion.

“These are not handouts but are concessionary loans repayable by the companies over a period of time and we demand that the announcement made indicating the desire of the Government to support the industry be realistically implemented by the relevant institution, it will be the responsibility of the Central Bank to follow suit and offer this stimulus in a much more meaningful and expeditious manner. We also request the utility service providers to be flexible and not put surcharges on the delayed bill payments,” Cooray emphasised.

He said any kind of tangible support from Government institutions are welcome, to ensure that areas such as technology, retention of qualified manpower and safeguarding the skillset he emphasized and active support from the Central Bank was the need of the hour since the Government’s policy is now put in place.