Report finds 2 major barriers to remediation in B'desh

20 Jun '16

1 min read

According to a report by International Finance Corporation (IFC) and International Labour Organization (ILO), there are two major barriers to financial remediation in the Ready Made Garment (RMG) sector in Bangladesh – lack of financial knowledge and high interest rates.

The report titled 'Remediation Financing in Bangladesh's Ready Made Garment Sector: An Overview' was formulated to analyse the cost of safety remediation for structural, electrical and fire safety work in RMG factories, as well as the ability of factories to finance this work.

The total remediation cost for most of the RMG factories in Bangladesh range from $1,00,000 to $2,50,000. Interest rates for the same can range from 9-18 per cent. Also, the factory owners cannot independently tackle audited balance sheets, cash flow projections and profit and loss statements, and need guidance in these matters.

According to the report, remediation activities worth $294 million have been already carried out in the Bangladesh RMG sector.

Approximately $197 million has been allocated for RMG remediation specifically by the country's banking sector and credit facilities. (MCJ)

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