- Simone Preuss |
After safety inspections and worker training, the safety campaign for the Bangladeshi garment industry just got another much needed boost: the International Finance Corporation (IFC) will support local banks by providing 50 million US dollars in financing and will form partnerships with leading international buyers.
The IFC decided on this step - the first in a series of long-term financing measures to Bangladeshi banks - after many factories expressed difficulties in accessing the capital needed to make the required improvements for worker and workplace safety and to meet buyers' standards, the IFC explained in a statement.
“Broad, innovative partnerships are necessary to improve the safety of workers in this critical industry. Banks, international buyers and manufacturers have a shared interest in this issue because it’s indispensable to making Bangladeshi garment factories more competitive and sustainable,” said IFC CEO and EVP Jin-Yong Cai.
Concretely, this will mean that the IFC will provide 10 million US dollar each in financing to five Bangladeshi banks. In turn, the participating banks will be able to increase lending to garment factories that want to improve their structural, electrical and fire safety infrastructure. According to the statement, Prime Bank Limited has already signed up while four other Bangladeshi banks are expected to follow in the coming weeks.
To coordinate its efforts with ongoing upgrades and compliance monitoring, the IFC has signed separate cooperation agreements with the Alliance for Bangladesh Worker Safety (Alliance) and the Accord on Fire and Building Safety in Bangladesh (Accord).
In addition, the Alliance and the Accord will each contribute 250,000 US dollars to support the implementation of the program. Together with the IFC, the two organisations have provided training to participating banks about the factory remediation process, understanding the corrective action plans and providing updates about the remediation process and compliance.