Bangladesh has made a strong economic recovery from the COVID-19 pandemic. During FY22, the RMG export was $42.62 billion, about 82 per cent of the total $52.08 billion. The Country is poised to overtake China in garments export to the EU. Bangladesh’s share in the global RMG, market is only 6.50% as against China’s 32.21%. BGMEA is targeting to export US$100 billion worth of garment items by 2030. Besides, Bangladesh has immense potential to increase its export of leather goods, pharmaceuticals, plastic products and other products.
The exporters from Bangladesh, at the present time, are selling goods on contract without LCs at 90 to 120 days usance/credit term. In these cases, exporters are getting the export bills discounted before maturity at the counter of banks abroad at a reasonable cost. However, during the worldwide closedown due to COVID-19, Bangladesh Bank on June 30, 2020, brought radical changes in foreign trade transactions through the issuance of FE Circular No. 25. The critical features of the circular are export on credit terms with transport documents consigned directly to importers, Payment undertaking/payment risk coverage from external sources, Electronic presentation of documents and early payment option on non-recourse basis up to an appropriate extent.
Trade finance is critical for supporting global trade flows. Global trade is set to reach almost US$32 trillion in 2022. Demand for foreign goods proved resilient throughout 2022, with trade. However, the current persistent inflation tightened financial conditions, Russia's war against Ukraine, the lingering COVID-19 pandemic and supply-demand mismatches have further slowed the global economic outlook resulting in reduced export from Bangladesh. Besides, higher import bills and lower remittances, Bangladesh is faced with depleting foreign exchange reserves. In the context of the ongoing global financial and economic crises, banks and businesses need to take stringent measures to ensure that their sales transactions are watertight.
Open account and International factoring are being adopted by most countries worldwide for better and smooth trade finance. Factoring in South Asia as a region in general and Bangladesh, in particular, has still been very limited, whereas factoring in most other regions of the world has exploded with the shift towards open account trade.
The ICC Bangladesh, in partnership with FCI and BIBM/Bangladesh Bank, will host a one-day-only training workshop on How to deploy supply chain finance and international factoring in your business in this post-pandemic world on Sunday, 19 February 2023, at the Westin Hotel in Dhaka, Bangladesh. The seminar will explore and explain how companies can build an international factoring business from within.
The aim of the Workshop is to allow the officials from government agencies, regulatory authorities, Bangladesh Bank, commercial banks, and entrepreneurs to learn more about open accounts and factoring in general and international factoring in particular, its benefits and growth potential. It will also provide an opportunity to interact with the members of the FCI, representing experienced factoring executives from around the world.
Leading industry experts will share their expertise in various sessions. Speakers include: Ms Sarah C.H. Pon, Chairman of the FCI Marketing Committee; Ms Aysen Çetintas, FCI Education Director; Mr Peter Mulroy, FCI Secretary General; Dr Prashanta Kumar Banerjee, BIBM Professor and Mr Thompson Lui, FCI Regional Manager of South and South East Asia.
Discover more