Bangladesh garment factories have reported a surge in cancelations or delaying of shipped orders following the outbreak

Bangladesh garment factories have reported a surge in cancelations or delaying of shipped orders following the outbreak

The Bangladesh arm of HSBC bank has said it will roll out measures to provide "immediate assistance" to the suffering textile and garments sector that has been hit by Covid-19 and the related economic impact.

HSBC said it would work to ease cash flow pressures faced by businesses and help customers to tackle market uncertainties, including disruptions to their supply chains.

Measures include a 90-day extension of import liability maturing in the next three months where export shipments are delayed. The bank will also provide special short term loans up to one year with principal moratorium for four months, which can be used for the purpose of supporting workforce costs – including wages, bonus, utility and/or other overhead payments. It will allow three months moratorium against existing term loans as well.

Bangladesh is the world's second-largest garment exporter. A major driving force of the country's economy, textile and apparel constitutes about 90% of the country's exports.

Factories across Bangladesh have voiced their concerns over buyers cancelling orders that have already been produced or shipped or asking for them to be delayed – factors they say could lead to workers being unpaid. 

The president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Rubana Huq, last week publicly urged international apparel brands not to delay shipments or cancel orders on concerns it could lead to social unrest across the country as factories are forced to shut down.

Francois de Maricourt, CEO, HSBC Bangladesh, said: "We are going through challenging times in Bangladesh and are committed to continuing our support to the local community to the best of our capabilities. We empathise with our customers who have to deal with the turbulence caused by this unforeseeable outbreak and we are taking actions to help alleviate their financial burdens."

Md Mahbub ur Rahman, CEO designate, HSBC Bangladesh, added: "As a cornerstone of the Bangladeshi economy, the above-mentioned facilities are designed to alleviate impacts for customers in the textile and garments sector. The Bank will actively evaluate and try to introduce specific initiatives to support its customers in other sectors as required."