A large number of wet-blue factories in Bangladesh are facing cash flow problems. Many had taken out loans and are unable to repay due to the high level of interest. The government imposed restrictions on the export of wet-blue in 1990 to improve exports of finished and crust leather. Prior to this wet-blue tanners had been doing excellent export business.

However, while it had often been possible to make a handsome profit, the owner of a sick tannery said they started suffering losses soon after the ban imposed on the export of wet-blue. They alleged that the banks were putting pressure on the sick units for repayment.

Only 35 tanneries commissioned under financial assistance from the Asian Development Bank (ADB) are well-equipped. Entrepreneurs in the leather sector tried hard to convince the government that the higher rate of interest on borrowed funds has made a large number of wet-blue producers bankrupt.

The following tanneries in Dhaka, who had taken loans from Bangladesh Shilpa Bank, Dhaka, have been put to auction:

1) Milon Tanneries Ltd, Hazaribagh, Dhaka.

2) Jamalpur Leather Industries Ltd, Jamalpur.

3) Oleander Leathers Ltd, Rupganj, Narayangunj.