The five local banks, which will pay $50 million provided by the International Finance Corporation as loans for the RMG factory upgrades, are reluctant to extend the support to the factory owners who are not their long-term clients, denting the objective of the credit programme, apparel makers said. On July 7 this year, the IFC, a member of the World Bank Group, announced to provide the fund to five Bangladeshi banks –– Prime, BRAC, EBL, UCB and City –– for making loans available for the garments factories for remediation purposes. Under the programme, the IFC will provide the banks $10 million each in finance that will allow them to increase lending to garment factories to improve their structural, electrical and fire safety infrastructure. Garment manufacturer said that there are many factories which need financing for implementing corrective action plans provided by the retailers’ groups but the factory owners are not getting the IFC credit facility as they have no business relations with the selected five banks. ‘The objective of the loan programme taken by the IFC in cooperation with North American retailers’ group Alliance and European buyers’ group Accord will not be fulfilled, if the local banks do not offer equal treatment to both clients and non-clients in disbursing loans,’ Abu Salam Murshedy, president of the Exporters Association of Bangladesh, told New Age on Sunday. There are many medium-sized factories where remediation financing is very much needed but they are not getting loans as they are not clients of the five banks, he said. Urging the banks, retailers groups and IFC for taking more credit projects to ensure loans for all the factories which need credit, Salam said that the approved amount of fund was not sufficient for completion of remediation. Former BGMEA vice-president Shahidullah Azim said that they had requested IFC, Accord on Fire and Building Safety in Bangladesh and Alliance for Bangladesh Worker Safety to take step so that the factory owners can get credit from the IFC fund through any local banks. The five banks, which signed agreement with the IFC for disbursing the loans, will have to open the remediation financing facility for all factories as it is not pragmatic that all factory owners will be the clients of five banks, he said. Faruque Hassan, vice-president of the Bangladesh Garment Manufacturers and Exporters Association, said that they would sit with the banks and the buyers’ groups to ensure equal treatment in loan disbursement. Ali Reza Iftekhar, managing director of Eastern Bank Limited, said the clients of the bank would get priority in getting loans for factory remediation. ‘The factory owners with whom we have satisfactory level of transactions will get priority in getting the loans,’ he said. Sohail RK Hussain, managing director of The City Bank, said client or non-client was not issue; the loan would be approved based on the project. ‘If the project is creditworthy, it will get finance even if the applicant is not client of the bank,’ he said.
