Washington, US (BBN) - International Finance Corporation, the private investment arm of World Bank, has agreed to invest up to $55 million to support Dhaka Bank‘s working capital solution, and help the bank aid foreign currency needs of SMEs in Bangladesh.
Under the agreement, IFC will provide Dhaka Bank a short-term loan for of up to $20 million for working capital solutions and a $35 million guarantee under Global Trade Finance Program, IFC said in a disclosure, reports Deal Street Asia.
“The financing provided is a fit with the World Bank and IFC strategy of promoting economic growth by providing access to finance to underserved market segments and promoting international trade, thereby leading to improved competitiveness, job retention and creation,” it said.
Founded in 1995, the Dhaka-based bank has total assets of $2.48 billion as of September 30, 2016.
Present in almost all major cities in Bangladesh, it has 95 branches and 54 owned ATMs.
Dhaka Bank is publicly listed on Dhaka and Chittagong Stock Exchanges, with 36.5 per cent of its shares owned by the general public and 24.2 per cent by local institutions. Around 39.1 per cent of shares is held by the sponsors/directors and 0.2 per cent is held by foreign investors.
IFC’s $5 billion Global Trade Finance Program extends and complements the capacity of banks to deliver trade financing by providing risk mitigation in new or challenging markets where trade lines may be constrained.
IFC has been actively extending such loans to Asian banks. It recently agreed to invest up to $150 million in Thailand Military Bank (TMB) to support the latter’s loan extension to Thai small-and medium-sized enterprises.
Prior to that in December, Indonesia’s Bank Tabungan Pensiunan Nasional got the backing of $100 million in loans from the World Bank arm.
Also, in September, Vietnam Prosperity Joint Stock Commercial Bank, commonly known as VPBank, has secured a $50 million syndicated loan from IFC.
BBN/SK/AD