Press Releases

IFC Partners with Bhutan National Bank on Trade Finance

In New Delhi:
Minakshi Seth

Phone: +91 11 4111 1058


Thimpu, Bhutan, August 28, 2007 — IFC, a member of the World Bank Group, today announced that Bhutan National Bank has become the first bank in Bhutan to join its Global Trade Finance Program. The program is providing the bank with a $1 million facility, risk coverage in a developing market, and a global network that will help grow the bank’s trade finance business.  

This transaction builds on Bhutan National Bank’s earlier work with IFC Advisory Services in the region – the SouthAsia Enterprise Development Facility – in addressing the needs of small and medium enterprises in the country and developing the standard operating procedures of the bank.

The 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 to increase the volume and value of trade transactions, with enhanced tenors and access to competitive pricing terms.  The letter of credit, bank guarantee, and other trade-related instruments issued by Bhutan National Bank will now be confirmed by a large number of banks (through the IFC guarantee) listed by IFC under this program across the globe.

Kipchu Tshering, Bhutan National Bank’s Managing Director, said, “Having previously worked with IFC-SEDF, we are delighted to strengthen our relationship through the Global Trade Finance Program. IFC’s support will help us create new and valuable business opportunities for our clients in Bhutan.”

Farida Khambata, IFC Regional Vice President for Asia and Latin America, on her first visit to the country, said, “Bhutan is a unique country that has experienced social and economic development as a result of its commitment to growing while preserving the environment, its culture, and good governance. It gives me great pleasure to partner with one of the country’s highly progressive and forward-looking financial institutions.”

Paolo M. Martelli, IFC Regional Director for South Asia, said, “Through the program, IFC provides risk coverage in difficult markets and combines global reach and maximum flexibility.” He added that this transaction fits well with IFC’s strategy to partner with financial institutions and banks in frontier countries.

Trade finance is an important example of the many products and services IFC offers to help develop a sector. IFC promotes such deals by delivering solutions through a global network of participating banks. The program complements the capacity of banks to deliver trade financing.

IFC Advisory Services is an increasingly large component of IFC’s contribution to private sector growth in developing regions. IFC SEDF hopes to continue collaborating to help Bhutan National Bank develop new products and services and build its institutional capacity in risk management.

Since Bhutan became an IFC member country in 2003, IFC has made a $10 million investment in a hotel project to support Bhutan’s tourism sector. On the Advisory side, important initiatives by IFC include advice and training to local financial institutions, feasibility studies for an IT park and industrial estates, women entrepreneurship development programs, establishment of a knowledge center, and promotion of an SME toolkit.

Currently, IFC Advisory Services in the region and the World Bank are working closely with the Royal Monetary Authority of Bhutan on establishing a nationwide electronic payments system. A comprehensive survey of the SME sector in Bhutan is underway that will be used by the Royal Government of Bhutan in developing the country’s SME strategy.

Trade development and advisory services for issuing banks represent an integral part of the IFC 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, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing capital in the international financial markets, and providing advisory services to businesses and governments. IFC’s vision is that poor people have the opportunity to escape poverty and improve their lives. In FY06, IFC committed $8.3 billion, including loan participations, to 284 investments in 66 developing countries. For more information, please visit

IFC SouthAsia Enterprise Development Facility

IFC-SEDF is a multidonor-funded facility managed and operated by IFC. One of 11 such regional programs managed by IFC worldwide, the facility is funded by IFC, the governments of the Netherlands and Norway, the European Commission, DFID (U.K.), CIDA (Canada) and the Asian Development Bank. Set up to promote the growth of SMEs in the region, it facilitates increased access to finance and provides quality business development services to projects in Bangladesh, Bhutan, northeast India, Maldives, Nepal, and Sri Lanka.

About Bhutan National Bank Limited

Bhutan National Bank Limited was set up by the Royal Government of Bhutan and other founders in 1996 to promote growth and competition in the financial sector.  The bank’s current promoters are the National Pension and Provident Fund, Bhutan Trust Fund, Royal Insurance Corporation of Bhutan Limited, Royal Government of Bhutan, and the general public. The bank had a total asset base of $215.20 million and net worth of $20.83 million as of December 31, 2006.