Apparel factory owners in Bangladesh are increasingly becoming dependent on the country's stock market for raising low-cost funds to expand their business, thanks to higher interest rates of commercial bank loans.  As per the initial public offering prospectus of some companies, most of the prospectus aimed at fund raising for paying-off bank term loans, capital investment, expanding of the existing plants, working capital purpose, purchasing new machinery, constructing new factory buildings, purchasing of land and land development.

Entrepreneurs want to be enlisted with the stock market as it reduces the cost of financing business expansion. A company has to count high interest for bank loans and thus the lion’s share of the profits is being paid as bank interest. Therefore, they prefer the stock market for raising low-cost funds. Also getting funds from outside the banking system would help reduce debt and increases the brand value with a further scope for indirect advertisements for the company. Currently, 36 textile companies are enlisted with the Dhaka Stock Exchanges and the sector represents 3.5 per cent of the total market capitalization.