The Alliance for Bangladesh Worker Safety (Alliance) has brokered an agreement with the International Finance Corporation (IFC) to help suppliers finance factory repairs. Through the resulting credit facility, the IFC will provide US $ 10 million each to five Bangladeshi banks—US $ 50 million total—for affordable loans to factory owners making necessary safety repairs. This credit facility, known as the Bangladesh RMG SEF Safety Remediation Financing Program, will 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 Alliance, which represents 26 global retailers and brands, will donate US $ 250,000 to IFC to fund its operation. The Alliance will provide on-the-ground resources—including a sizable team of qualified inspectors—to monitor that factory owners are making progress toward completion of their corrective action plans (CAPs). CAPs are provided to every factory and outline the specific fire, structural and electrical repairs necessary to bring factories into compliance with international standards. Timely progress on the CAPs is required under this arrangement in order for factory owners to maintain favorable loan terms. Alliance professionals will also provide technical assistance to banks on the remediation process and facilitate introductions between factory owners and lenders.
