Business leaders in Bangladesh are calling on the country's central bank to ease letter of credit (L/C) regulations.

They are also recommending that traders use a broader range of trade finance options, particularly factoring.

Trade finance options

At a roundtable meeting of the Dhaka Chamber of Commerce and Industry and Bangladesh Institute of Bank Management, participants urged Bangladesh Bank to ease L/C rules to promote both export and import business.

The meeting also recommended that Bangladesh should make plans to introduce factoring as a trade finance option.

Limited facilities

Regulators are contemplating factoring, particularly to help manufacturers and exporters to ease cash flow pressures associated with deferred payments from buyers.

Some non-bank financial institutions in Bangladesh provide limited factoring facilities, but the uptake of this type of trade financing in the country is very limited.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.