The absence of an export credit guarantee scheme in Bangladesh has resulted in significant losses for exporters, with some dues remaining unpaid for decades. BGMEA leaders argue that implementing such a policy is crucial for protecting exporters and ensuring the stability of the economy. For example, Designtex Group, a Bangladeshi readymade garment (RMG) manufacturer, faced a significant challenge when Edinburgh Woollen Mill (EWM), a British clothing brand to which Designtex exported clothes worth around $0.48 million during the Covid-19 crisis, declared itself bankrupt.
Export credit guarantee schemes are common in many countries, with Indian exporters, for example, enjoying up to 90% insurance coverage of their total LC value. Under these schemes, a certain amount of the premium is paid by the exporter, and the rest is covered by the buyer or the government.
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