The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) yesterday urged the government to release Tk 500 crore in due export incentives to help small and medium enterprises (SMEs) pay workers' bonuses and other dues ahead of the upcoming Eid-ul-Fitr.

The finance ministry agreed in principle to release Tk 325 crore soon, said BGMEA Administrator Anwar Hossain over the phone after meeting finance ministry officials at the secretariat in Dhaka.

Hossain also requested the banking division secretary of the finance ministry not to adjust the incentive with bank loans before Eid payments, as SMEs lack financial capacity due to the sluggish economic situation.

To facilitate payments to workers, the finance ministry and the central bank last week disbursed Tk 2,000 crore in cash incentives on export receipts to garment exporters.

Hossain said the upcoming Eid is unique in terms of salary payments. "This is not a good time for businesses, as they are facing various difficulties."

"Moreover, factories must pay salaries for February, half of the salary for March, and the full Eid-ul-Fitr bonus. So, although business has not been good, expenses remain high," the BGMEA administrator added.

The labour and employment ministry last week instructed factories to clear all arrears, salaries, and bonuses by the 20th day of Ramadan.

According to intelligence reports and the BGMEA's assessment, nearly 150 factories are in a vulnerable position regarding worker payments ahead of Eid due to financial constraints, Hossain said.

However, the BGMEA and concerned banks are continuously working on the issue. The disbursement of cash incentives last week solved the problem to a great extent, he said.

Now, the BGMEA is working to resolve the financial issues of 42 factories. It appears that the disbursement of Tk 325 crore will address major problems plaguing these factories, he added.

Ultimately, only three to four factories will face difficulties due to their dire financial condition, Hossain said.

This year, many factories, the majority being garment units, either faced closure or shut down temporarily due to political and labour unrest following last year's political changeover.