The Alliance for Bangladesh Worker Safety, which represents 26 global retailers and brands, for the first time, has brokered an agreement with the International Finance Corporation (IFC) to assist Bangladeshi factory owners for factory upgrading, says a statement published on the alliance website.
According to the statement, the IFC will provide USD $10 million each to five Bangladeshi banks for affordable loans to the factory owners making necessary safety repairs.
The prescribed banks are Eastern Bank Limited (EBL), BRAC Bank, the Prime Bank, and the City Bank and the United Commercial Bank (UCB).
“We are pleased to join forces with the IFC to launch this initiative, which promises to provide much-needed support to factory owners, speed the process of implementing repairs and help protect millions of garment workers,” said Ellen Tauscher, independent chair of the Alliance, was quoted in the statement.
“By working together to drive results, we can help an entire industry embrace and implement a new, sustainable standard for safe workplaces,” said Tauscher.
The alliance Dhaka office said the process of the credit sanction would take one-two months to be completed. The IFC would fix the interest rate over the loan, the alliance office added.
According to the statement, this credit facility, known as the Bangladesh RMG SEF Safety Remediation Financing Program, would offer affordable interest rates and allow loans to be paid back over a period of three to five years, dramatically lowering the risk and financial burden for factory owners.
The statement added that the alliance would provide on-the-ground resources-including a sizable team of qualified inspectors-to monitor that factory owners are making progress towards completion of their corrective action plans (CAPs), which are provided to every factory and outline the specific fire, structural and electrical repairs necessary to bring factories into compliance with international standards.
Leaders of the BGMEA have been pressurising two global retailers and brands’ platforms-the Accord on Fire and Building Safety in Bangladesh (the Accord) and the Alliance for Bangladesh Worker Safety-for years to provide lower interest rate loans for upgrading work place safety.
The Accord on Fire and Building Safety in Bangladesh (the Accord) was signed on 15 May, 2013, while the Alliance for Bangladesh Worker Safety was formed on 10 July, 2013, after the devastating Rana Plaza collapse.
BGMEA president Atikul Islam said, “The factory owners are under pressure in terms of factory repairing for safety. The initiative taken by the alliance will relax their tension.”
Source: Prothom Alo
