DHAKA: IFC, a member of the World Bank Group, and leading apparel supplier chain company VF Corporation provided loans to three Bangladeshi garment factories Sunday under a new program for funding fire and building safety improvements.
The financing will support its suppliers to improve workplace safety conditions, says a press release.
IFC and its partner BRAC Bank are lending up to $10 million to VF’s contract suppliers, and the company is providing a full corporate guarantee under the financing arrangement.
VF’s guarantee to back the loans makes it possible for IFC to lend at lower interest rates.
The financing arrangement from VF and IFC enables factory owners meet the stringent standards set by the Alliance for Bangladesh Worker Safety, an industry group of international apparel manufacturers and buyers whose work includes inspecting Bangladeshi garment factories and developing corrective action plan for meeting the standards. VF is one of 26 Alliance members.
“Providing these loans to help supplier factories fund the necessary improvement is another step in VF’s efforts to ensure the safety of the people making our products in Bangladesh,” said VF’s Supply Chain president Tom Glaser.
IFC disbursed an initial set of loan payments, totaling $1.3 million, to three factory owners: Arunima Sportswear, Olio Apparels, and Radisson Apparel.
These owners will use the capital to invest in safety upgrades such as the installation of fire sprinklers, fire doors and detection systems, along with other necessary repairs and safety precautions.
“The apparel industry has provided employment and reduced poverty for millions of people in Bangladesh,” said Sergio Pimenta, IFC Director for Manufacturing, Agribusiness and Services.
“This financing model, which we think could work well for other buyers and suppliers, will help improve work conditions and facilitate the growth of the readymade garment industry.”
VF and IFC are granting loans ranging from $100,000 to $1 millionto VF’s supplier factories. The lending program is part of VF’s efforts to help suppliers assess and manage performance standards for environmental and social risks.
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. In FY14, we provided more than $22 billion in financing to improve lives in developing countries and tackle the most urgent challenges of development. For more information, visit www.ifc.org
About VF Corp
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 highly diversified portfolio of 30 powerful brands spans numerous geographies, product categories, consumer demographics and sales channels, giving VF a unique industry position and the ability to create sustainable, long-term growth for customers and shareholders. The company’s largest brands are The North Face®, Vans®, Timberland®, Wrangler®, Lee® and Nautica®. For more information, visit www.vfc.com
BDST: 1436 HRS, DEC 08, 2014
