DHAKA: IFC, a member of the World Bank Group, and global apparel and footwear company VF Corporation, will provide up to $10 million to help VF suppliers in Bangladesh finance fire and building safety upgrades in their factories.
VF, the parent company to many well-known brands including The North Face®, Vans®, Wrangler® and JanSport®, will provide a full corporate guarantee in support of loans for its suppliers, said an IFC press release on Thursday.
This enables IFC and its long standing client BRAC Bank, a leading institution contributing to small and medium enterprise growth in Bangladesh, to lend to suppliers at lower interest rates and helps suppliers speed up fire and building safety upgrades.
The garment sector in Bangladesh accounts for 80 percent of the country’s total export earnings and 20 percent of its GDP. It employs more than 4 million workers — 80 percent of them women — in formal jobs in more than 4,500 factories.
The sector, including buyers and suppliers, is eager to improve workplace environment and sustainable competitiveness, the release said.
VF is a founding member of the Alliance for Bangladesh Worker Safety, an industry group of international apparel manufacturers and buyers.
This group has provided fire and safety training to more than 1 million Bangladeshi factory workers and carried out inspections at all 587 factories that supply to its members.
Its work has resulted in corrective action plans for bringing factories up to acceptable standards. Lack of financing is an obstacle for many suppliers needing to invest in these safety upgrades.
‘The safety of the people making our products around the world is an imperative,’ said Eric Wiseman, chairman, president and CEO of VF.
‘Our program with IFC helps to ensure that our suppliers have access to the necessary capital to complete safety improvement plans.’
Serge Devieux, IFC Director for South Asia, said, ‘Employment in the apparel industry has reduced poverty for millions of women in Bangladesh’.
‘This financing model, which we think could work well for other buyers and suppliers, will help Bangladesh’s suppliers improve work conditions and strengthen the country’s ability to attract garment manufacturers.’
This financing arrangement with VF Corporation is part of IFC’s broader approach to transforming Bangladesh’s textile sector.
IFC also launched its supplier-finance program, which allows suppliers to improve their access to working capital. Besides providing financing, IFC supports better labor and environmental standards through advisory programs such as Better Work Bangladesh and the Bangladesh Partnership for Cleaner Textiles.
IFC is also investing in energy and power to improve power supply in the electricity grid and reduce the need for dangerous rooftop generators.
About VF Corporation
VF Corporation (NYSE: VFC) is a global leader in the design, manufacture, marketing and distribution of branded lifestyle apparel, footwear and accessories.
The company’s largest brands are The North Face®, Vans®, Timberland®, Wrangler®, Lee® and Nautica®. For more information, visit www.vfc.com.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector.
Working with private enterprises in about 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity.
BDST: 1348 HRS, SEP 04, 2014
