Readymade garment (RMG) factories will get low-cost funds up to Tk30 crore for investment in improving their workers' safety to overcome the Covid-19 pandemic situation.

The pre-finance credit facility is offered to eligible RMG factories under social upgradation aiming at improving the safety, health and hygienic facility of workers and workplace environment, said a circular issued by the Bangladesh Bank on Thursday.

RMG owners will get the fund under the "Programme to Support Safety Retrofits and Environmental Upgrades in the Bangladeshi Ready-Made Garments Sector Project (SREUP)" formed by the government.

The fund was constituted in March 2019 with a total size of around $17 million sponsored by AFD (AgenceFrançaise de Développement).

The initial objective of the fund was to provide funds to RMG factories for safety retrofits and environmental upgradation.

Now, RMG industries will get the fund for Covid-19 related safety upgradation.

The maximum limit for each factory is Tk10 crore or equivalent of EUR 1 million at an interest rate of 7%, according to SREUP fund guideline.

The ceiling may be extended up to Tk30 crore or equivalent of EUR 3 million in case of major environmental upgradation or any other duly justified and documented case.

Under this finance scheme, borrowers will get loans usually for 3 to 5 years which may be extended up to 7 years. 

Eligibility criteria

Companies having ownership of both a RMG factory and the building where the factory is located, companies owning a RMG factory but not the building where the factory is located, and the owners of buildings where at least one RMG factory is located will get loans from the fund.