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IFC Invests $55 Million in Bangladesh’s City Bank to Fund Small Businesses
Dhaka, Bangladesh, June 28, 2012
—IFC, a member of the World Bank Group, is providing $55 million in a loan and trade guarantee to Bangladesh’s The City Bank to help it meet the short-term foreign exchange requirements of its small and medium business clients in the wake of a foreign-currency liquidity squeeze.
The funds are in the form of a short-term, $25 million loan from IFC’s Bangladesh Small and Medium Enterprise Liquidity Facility, and a $30 million guarantee from IFC’s Global Trade Finance Program, which promotes trade among emerging markets.
A plan to phase out direct foreign exchange support by the central bank has disrupted the foreign exchange market, and this investment will enable The City Bank to issue and discount timely letters of credit, allowing export-oriented small and medium enterprises to have continued access to trade finance. Additionally, the loan and trade guarantee will pay for critical value-chain imports, promoting Bangladesh’s global trade.
Mahmood Sattar, CEO of The City Bank, said, “IFC helped fill a critical liquidity need of their borrowers in a market where working capital and trade finance is either prohibitively costly or not available.”
Kyle F. Kelhofer, IFC Country Manager in Bangladesh, said, “This investment seeks to strengthen local financial institutions with capital needed for trade financing. The funds will especially support export-oriented companies and small entrepreneurs forming the backbone of the country’s economy. Most of these enterprises import, add value, and then re-export merchandise.”
Last year, IFC’s $80 million Bangladesh Small and Medium Enterprise Liquidity Facility provided financing support to BRAC Bank, Eastern Bank, and Southeast Bank.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal 2011, amid economic uncertainty across the globe, we helped our clients create jobs, strengthen environmental performance, and contribute to their local communities—all while driving our investments to an all-time high of nearly $19 billion. For more information, visit
www.ifc.org
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