- JAFF says concessionary loans under emergency COVID-19 refinance scheme not released to industry yet
- Such funds were to be used to cover basic wages of employees for April to June
- Stresses need for CB to ensure implementation of loan scheme effectively
By Shabiya Ali Ahlam
Worries continue to deepen for the local apparel sector with the concessionary loans under the emergency COVID-19 refinance scheme not being released yet despite the government having made the announcement nearly two months ago.
With the sector facing severe financial challenges due to order cancellations, the funds from concessionary loans were to be used to cover the basic wages of employees for the months of April to June.
The Joint Apparel Association Forum (JAAF), the apex body representing the apparel industry in Sri Lanka shared that none of the companies have received the said loans and no support from the utility service providers have been extended as promised.
“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 to avoid a total collapse,” said JAAF Secretary General Tuli Cooray, highlighting sector woes.
However, Cooray also added that the industry strongly believes that the refinancing package of Rs.50 billion offered by the Central Bank through the country’s banking system is “grossly inadequate” to meet the demands of all sectors in the economy including that of the apparel industry.
While taking note of the developments taking place in peer countries, Cooray said the industry is of the view that Central Bank must come up with a stimulus package that is not less than Rs.150 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 institutions.
It will be the responsibility of the Central Bank of Sri Lanka to follow suit and offer this stimulus in a much more meaningful and expeditious manner,” he stressed.
Cooray added that the industry also requests utility service providers to be flexible and not add surcharges on the delayed bill payments.
As the sector is grappling with a number of issues that would take time to iron out, Cooray asserted that any tangible support from government institutions are welcome, so that areas such as technology, retention of qualified manpower and safeguarding of the skillsets, amongst other areas, receive the required focus.
To ensure the expected relief reaches the sector as promised, he stressed that active support from the Central Bank is the need of the hour since government’s policy on supporting the COVID-19 impacted sectors are already in place.
JAAF is considered as the voice of the apparel sector and the forum seeks to steer the industry to become the world’s number one apparel sourcing destination.
The forum was actively working towards pushing the industry to reach the US$ 8 billion export target by 2022, however, with the sector being heavily impacted by the pandemic, the realisation of the goal is unlikely.
Sri Lanka earned US$ 5.3 billion from apparel exports in 2019. The industry forecasts the apparel export earnings to decline by US$ 1.5 billion this year to reach US$ 3.5 billion under the best case scenario.