ILO has joined banks and industry to seek solutions to access to finance to enhance factory safety in the Bangladesh garment sector. In a workshop held in Dhaka, representatives from employers’ organisations, banks, development partners and enterprises came together to discuss the barriers to accessing funds, an issue that is hindering remediation work in ready-made garment (RMG) factories.

In the aftermath of the Rana Plaza collapse, fire, safety and electrical assessments were conducted in 1,549 factories under the Government of Bangladesh’s National Initiative. This work was supported by the ILO with funding from Canada, the Netherlands and the United Kingdom. With the completion of inspections, emphasis switched to remediation of these factories.

“It is vital that factories are able to carry out remediation and if access to finance remains an obstacle to this, then it needs to be addressed,” said Country Director of ILO Bangladesh Srinibas Reddy. Mr Reddy hoped that the ideas generated in the workshop would help ease access to financing for factories under the national initiative.

The participants broke into groups to identify bottlenecks and procedural challenges to accessing finance for remediation and a number of practical recommendations were made by the groups and during interactive sessions at the workshop.

Mr. S M Mohsin Hossain, Deputy General Manager of Bangladesh Bank informed that the government has established a Two Step Loan (TSL) fund in Bangladesh Bank to strengthen the building safety of RMG factories in Dhaka, Narayanganj and Gazipur District and Chittagong City.

“Owners of RMG factories and factory buildings are eligible for this credit line, along with BGMEA, BKMEA and BGAPMEA members. This includes factories using rented buildings provided that the building owners agree,” he said.

Most factories under the national initiative are housed in rented and shared buildings that accommodate other establishments. Mr Hossain’s remarks were a welcome message for factory owners who struggle to relocate their factories and carry out remediation.

During the event, representatives of the International Finance Corporation (IFC), Japan International Cooperation Agency (JICA), French Development Agency (AFD) and GIZ provided information on their financing instruments while the Bangladesh Accord on Fire and Building Safety shared its experiences of remediation.  In addition, Public Works Department (PWD) under the Ministry of Housing and Public Works presented its Urban Building Safety Project through which short-term and long-term financial support is provided to RMG factory owners.

Also taking part in the event were representatives of the Department of Inspection for Factories and Establishments (DIFE), National Coordination Committee for Workers’ Education (NCCWE), Alliance for Bangladesh Worker Safety, Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers & Exporters Association (BKMEA), KfW Development Bank, Netherlands Embassy, UK Aid, Canadian High Commission and USAID.