IFC provides $30m to City Bank to support SMEs
The investment has come in the form of working capital support as part of the IFC’s $8 billion global Covid-19 fast-track financing facility
The International Finance Corporation (IFC) has provided the City Bank Limited with a loan of up to $30 million, equivalent to Tk255 crore, to support small and medium enterprises (SMEs) and export-import companies affected by Covid-19 in Bangladesh.
This investment has come in the form of working capital support as part of the IFC's $8 billion global Covid-19 fast-track financing facility.
The subsidiary of the World Bank disclosed it through a press release issued from its Dhaka office on Wednesday.
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The fund will help businesses cope with the ongoing global slowdown, marked by a collapse in tourism, plunging trade, disruptions to supply chains and diminished foreign direct investment, said the IFC.
The IFC supported 13 companies – over 190,000 employees in manufacturing, agriculture, services and energy sectors – with $554 million in the Covid-19 related funding in Asia and the Pacific region in the fiscal year 2019-20.
It also deployed $492 million in Covid-19-related trade finance lines in the region.
This financing has helped financial institutions provide liquidity to businesses dependent on trade, especially SMEs.
"Small and medium enterprises provide more than 35 percent of employment in Bangladesh and contribute to a quarter of the country's GDP," said Wendy Werner, IFC country manager for Bangladesh, Bhutan and Nepal.
Thousands of micro, small, and medium enterprises (MSMEs), and millions of farmers across Asia and the Pacific region stand to benefit from the first phase of Covid-19 crisis response funding from the IFC.
The aim of the programme is to help emerging market-based banks extend credit so that businesses can continue to operate, stemming job losses.
"The economic and social impact of Covid-19 will continue to exact a toll on people and businesses, leaving an indelible mark on the region's economies and private sector," said Alfonso Garcia Mora, the IFC's newly-appointed regional vice-president for Asia and the Pacific.
Since the outbreak, the IFC has made efforts to help both small and large businesses in Bangladesh, Pakistan, Sri Lanka, India, and Vietnam.
The support to companies focused on agriculture – between 15,000 and five million farmers and SMEs in their supply chain networks – will help boost farmers' income, strengthen agribusiness, and contribute to food security.
