Bangladeshi Garment Factories Get Improved Access to Financing for Factory Upgrades
The U.S. Agency for International Development signed this week two credit guarantee facilities that will help qualifying ready-made garment suppliers in Bangladesh access up to $22 million in long-term financing for factory upgrades and worker safety improvements. This assistance could help Bangladesh secure the restoration of its eligibility for duty preferences under the U.S. Generalized System of Preferences, which was suspended in June 2013 based on its failure to meet requirements related to worker rights.
The first agreement will guarantee up to $18 million in bank loans to RMG factories that supply brands that are members of the Alliance for Bangladesh Worker Safety, a group of 26 apparel companies and retailers. The second agreement will guarantee up to $4 million in bank loans to target financing opportunities for factories that are part of the Bangladesh Accord on Fire and Building Safety, which comprises more than 200 apparel brands, retailers and importers from 20+ countries, and the government of Bangladesh's Tripartite Action Plan, which is supported by the International Labor Organization.