The International Finance Corporation (IFC) has announced a programme to provide $50 million (£32.5 million) of finance to garment factories in Bangladesh to improve working conditions.
IFC, part of the World Bank Group, said the scheme would involve helping factories improve structural, electrical and fire safety to meet the standards set by international buyers.
Under the programme $10 million (£6.5 million) will be provided to five Bangladeshi banks to enable them to increase lending to garment factories specifically to improve safety infrastructure.
IFC has also signed agreements with the Alliance for Bangladesh Worker Safety and the Accord on Fire and Building Safety in Bangladesh, organisations which represent dozens of garment brands, to train banks, assist factories with upgrades and monitor compliance. The two organisations will also be contributing $500,000 (£325,000) to support programme implementation.
Jin-Yong Cai, CEO and executive vice president at IFC, said: “Broad, innovative partnerships are necessary to improve the safety of workers in this critical industry.
“Banks, international buyers, and manufacturers have a shared interest in this issue because it’s indispensable to making Bangladeshi garment factories more competitive and sustainable.”
The garment industry in Bangladesh employs more than four million people, mostly women, in around 4,500 factories and it accounts for about 80 per cent of the country’s exports.
The Accord on Fire and Building Safety in Bangladesh was established in the aftermath of the Rana Plaza disaster in which 1,134 people died.