Dhaka, Bangladesh, July 19, 2011—IFC,
a member of the World Bank Group, has launched an $80 million short-term
liquidity facility to provide banks in Bangladesh with working capital
and trade financing solutions following recent market disruptions in foreign
exchange availability in the country. The funds were made available through
the newly formed IFC Bangladesh Small and Medium Enterprise Liquidity Facility,
a rapid-response initiative to help meet funding needs of local banks and
Bangladeshi regulatory authorities have been particularly complimentary
of the speed and timeliness of IFC’s intervention and financing support.
The facility will enable small and medium enterprises, especially those
that are export-oriented, to have continued access to critical funding
for timely issuance and discounting of Letters of Credit.
In the first phase, IFC signed agreements with existing clients Eastern
Bank Limited, BRAC Bank, and Southeast Bank Limited. The facility is well
received by local bankers and subsequently will reach out to other banks
that could potentially receive similar financing.
Appreciating IFC’s swift response, the three banks’ CEOs expressed their
endorsement of IFC’s ability to put together “an innovative mechanism
to address the liquidity needs of their borrowers.” All three felt
IFC filled a critical market need in Bangladesh, where trade finance is
either prohibitively costly or not available given the country’s perceived
“The facility aligns with IFC’s financial sector strategy in Bangladesh,
by seeking to strengthen local financial institutions with capital, liquidity
support, and advisory services. Through the facility, IFC will support
the private sector, especially export-oriented companies and small entrepreneurs,
who form the backbone of the country’s economy,” said Kyle F. Kelhofer,
IFC Country Manager for Bangladesh.
The facility will help increase the number and value of short-term transactions
to finance the working capital needs of small enterprises and exporters
located in Bangladesh’s Special Economic Zones. IFC’s funding will encourage
international banks to follow IFC’s lead and finance the local banking
sector and increase their range of funding options. It will also help accelerate
export-led economic growth in Bangladesh in addition to supporting job
security in the small business sector.
IFC has been working in Bangladesh, with both investment and advisory services,
to strengthen underserved economic sectors and ease constraints to access
to finance, especially for small businesses.
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,