Dhaka, Bangladesh, November 29, 2020—In an effort to provide liquidity to bussineses affected by the COVID-19 pandemic in Bangladesh and help preserve jobs, IFC, a member of the World Bank Group, is making a fresh investment in the Bank Asia Limited. IFC's $25 million loan to Bank Asia Limited will provide critical working capital to help small and medium enterprises (SMEs) and corporate clients to continue their operations.
SMEs comprise over 90 percent of businesses in Bangladesh and employ over 20 percent of the adult population.
"IFC has been a reliable partner and this fresh investment will allow us to extend critical working capital and trade finance in the form of forex liquidity to affected businesses," said Md. Arfan Ali, President and Managing Director of Bank Asia. "We can now provide additional financial support to businesses, particularly to export and import-based SMEs and other corporate clients which ultimately impacts thousands of suppliers and employees who depend on these businesses."
The financing package is part of IFC's $8 billion global COVID-19 fast-track financing facility, aimed at helping companies stay afloat during the ongoing public health crisis. This investment comes under the Working Capital Solutions (WCS) program of the COVID-19 response envelope, which provides $2 billion globally to emerging-market banks, enabling them to support struggling firms. The International Development Association's Private Sector Window (IDA PSW) Blended Finance Facility is also supporting IFC's WCS program with a first-loss guarantee of up to $215 million in eligible countries, including Bangladesh.
Bank Asia, an IFC client since 2014, is one of the leading private-sector commercial banks in Bangladesh.
"Small and medium enterprises are key to ensuring a resilient and inclusive recovery and therefore they need to be supported as part of any meaningful recovery strategy" said Rosy Khanna, IFC Regional Industry Director, Financial Institutions Group – Asia and Pacific. IFC is committed to supporting its clients in Bangladesh in this important endeavor through trade finance solutions."
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.
About the IDA Private Sector Window
As part of the record $75 billion IDA18 replenishment, the World Bank Group created the $2.5 billion IDA Private Sector Window to catalyze private sector investment in the poorest and most fragile countries. Recognizing the key role of the private sector in achieving IDA18 objectives and the Sustainable Development Goals, the window provides concessional funds for co-investment alongside IFC and Multilateral Investment Guarantee Agency (MIGA) private investments. Concessional funds help to mitigate risk and reduce barriers, which unlocks and crowds in private investment in emerging markets. For more information, visit: https://ida.worldbank.org/psw
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