Dhaka, June 26, 2007
— IFC, the private sector arm of the World Bank Group, today announced that Export Import Bank of Bangladesh Limited (Exim Bank) is joining its Global Trade Finance Program. IFC is providing Exim Bank with a facility of up to $5 million within the program. This will be IFC's first facility to an Islamic bank in the country.
Paolo Martelli, IFC Regional Director for South Asia, noted, “In Bangladesh, where the Muslim population exceeds 88 percent, Islamic banking is expected to increase its foothold significantly in coming years. Better regulations and risk management tools are expected to gradually improve the operating environment for Islamic banks.”
IFC’s support to Exim Bank fits well with its strategy to partner with financial institutions and banks that are committed to developing Bangladesh’s corporate and small and medium enterprise sectors. IFC’s Global Trade Finance Program will provide Exim Bank with risk coverage in a difficult market and a global network that will help grow its trade finance business. This paves the way for countries like Bangladesh to increase their share of global trade.
Kazi Masihur Rahman, Managing Director of Exim Bank, welcomed the partnership, saying, “We are delighted to establish our relationship with IFC through its Global Trade Finance Program. IFC’s support will help us create new and valuable business opportunities for our clients in Bangladesh and around the world.”
The IFC Global Trade Finance Program supports trade with emerging markets worldwide and promotes the flow of goods and services between developing countries. IFC provides partial or full guarantees against underlying trade instruments and covers the payment risk of participating issuing banks. The program allows issuing banks, such as Exim Bank, to increase the volume and value of trade transactions, with enhanced tenors and access to competitive pricing terms.
Per Kjellerhaug, IFC Country Manager for Bangladesh, Bhutan, and Nepal, said, “The Global Trade Finance Program is one good example of the many products IFC offers to help develop a sector. It is an important mechanism to get local banks into an active global network that facilitates transactions in challenging markets, promotes competitive financing, and builds correspondent bank relationships with new institutions on a low-risk basis."
Trade development and advisory services for issuing banks represent an integral part of IFC’s Global Trade Finance Program. Advisory services modules include basic and intermediate courses on trade finance. In some cases, IFC places experienced trade finance bankers with issuing banks to help them develop their trade finance and other banking skills.
About IFC
IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries. IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products have committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit
www.ifc.org
.
About Exim Bank
Exim Bank was established in June 1999 by 33 founding shareholders representing industry and trade in Bangladesh. It started as a conventional commercial bank but converted to a full-fledged Islamic Sharia-based bank in July 2004. The bank made its initial public offer in 2004 and is a listed entity on two bourses in the country. It had a rights issue in 2006 to augment its capital base. The bank has grown significantly and now has 32 branches covering both metropolitan and rural areas in Bangladesh. Its main focus is trade finance, although it offers a full suite of savings and investment products for its corporate and SME clients.
