en.Wedoany.com Reported - Dhaka Times News, the Bangladesh Central Bank recently issued a notice officially launching a three-year revolving pre-financing program of 20 billion taka (approximately $162 million) for the leather industry, aimed at promoting the transformation of the country's leather and leather goods sector toward environmentally compliant, high value-added development.

The funds are self-financed by the central bank, with a three-year term and revolving usage. All licensed commercial banks in Bangladesh can participate in fund disbursement after signing agreements with the central bank. The maximum lending rate to enterprises is no more than 7%, while the rate at which participating banks borrow funds from the central bank is 4%. For new tannery projects, industrial waste treatment facilities, and raw hide preservation infrastructure, the maximum loan per project is 300 million taka (approximately $2.4 million); for new leather goods manufacturing plants, the maximum loan is 200 million taka (approximately $1.6 million); for technology upgrading loans for existing enterprises, the cap is 100 million taka (approximately $800,000); and working capital loans are capped at 300 million taka. Term loans have a maximum tenor of 7 years (including a 2-year grace period), while technology upgrading loans have a maximum tenor of 4 years (including a 6-month grace period).

The use of funds covers the construction and expansion of tanneries and leather goods factories, procurement of production equipment, construction of cold storage for raw hides, modernization of existing production lines, as well as investment in environmental facilities such as wastewater treatment plants and solid waste treatment systems, and also covers costs related to Leather Working Group (LWG) certification. Upstream supporting enterprises such as leather processing auxiliaries and footwear components suppliers are equally eligible to apply.

The program sets clear sustainability conditions: tannery processing enterprises must obtain LWG certification within two years of receiving the loan, and during the same period, at least 10% of their electricity consumption must come from solar power. To support the domestic raw hide industry, enterprises importing raw hides, wet blue, or finished leather are not eligible to participate in this program.

Bangladesh's annual leather export value is approximately $1 billion, but issues such as backward raw hide preservation standards, inadequate infrastructure, and low product value addition have long constrained the industry's development. The inadequate centralized wastewater treatment and solid waste disposal facilities at the Savar Tannery Industrial Estate have become a major obstacle for enterprises seeking LWG certification and accessing high-end overseas markets. Industry insiders believe that low-interest funds can only serve as a supporting measure; the industry still needs to formulate an overall development plan that coordinates raw hide storage, transportation and preservation, skilled talent cultivation, technological upgrading, and international certification to achieve long-term growth.