Bangladesh offering low-cost fund for safer apparel factories

BDApparelNews Desk
1 April 2019  

Workers working at an aparel factory in Bangladesh.

Workers working at an aparel factory in Bangladesh.

The government has formed a €50 million fund to give out low-cost loans for garment factory remediation with the view to enhancing workplace safety in the country's main export-earning sector, reports The Daily Star.

Each garment factory will get loans of up to €1 million from the fund at 7 percent interest rate. In exceptional cases, the amount of loan will be increased to €3 million for massive upgrades.

The fund can also be used to reduce pollution, ensure efficient use of energy and create a decent place to work, as per the notice sent out to all lenders and non-bank financial institutions yesterday.

Banks will have to count interest rate at 3.50 percent to get the fund.

The central bank will play the role of implementing agency for the fund, formed with soft loans from the Agence Française de Développement, which is a public financial institution that implements the policy defined by the French government.

Apart from the loan fund, an additional €14.29 million will be provided as grants to the successful garment factories and banks that disburse the loans properly.

European Union, Kreditanstalt für Wiederaufbau, Gesellschaft für Internationale Zusammenarbeit and the Bangladesh Bank will provide the fund as grant in the interest of the country's garment sector.

In fiscal 2017-18, garment exports fetched $36.66 billion, according to data from the Export Promotion Bureau.