Bangladesh: Supporting environmental and social risk management in the textile industry

EBL was set up in 1992 and is a medium-sized universal bank. It ranks 15th among Bangladesh’s banks. The bank’s activity mainly focuses on financing large companies – especially in the textile and clothing sectors (which account for 20% of its loan portfolio). For the past few years, EBL has been diversifying into the SME and retail banking segments. The bank’s main shareholders are Namreen Enterprise (9.97 % of the capital), a company active in the field of ship dismantling, and Mir Holdings (4.99% of the capital), a holding company operating in the construction and building materials sectors. EBL had 1,559 employees at the end of 2014.

Proparco’s credit line will be earmarked to finance companies in the textile and clothing sectors. The projects financed via this credit line must be for equipment purchases, production line extensions or new production plant constructions (without the purchase of land). They will be required to respect very strict environmental and social criteria. Proparco’s financial support will assist the bank in implementing an environmental and social risk management system in line with international standards. Environmental and social project audits have been conducted in this context.

This operation will contribute to strengthening EBL’s environmental and social (E&S) management system and to improving, via its financing, the E&S practices of textile and clothing companies in Bangladesh. It will thereby contribute to modernizing the sector and improving working conditions. More generally, it will support the development of this industry and promote employment in the sector. The financial support has trained and sensitized some 150 employees on these issues. The training will be replicated in 18 banks in Sri Lanka.