International Finance Corporation (IFC), a member of the World Bank Group, is making a fresh investment of $25 million in the Bank Asia Limited in an effort to provide liquidity to businesses affected by the COVID-19 pandemic in Bangladesh and help preserve jobs.
The IFC’s loan to Bank Asia Limited will provide critical working capital to help small and medium enterprises (SMEs) and corporate clients to continue their operations, said an IFC press release today.
The release said SMEs comprise over 90 percent of businesses in Bangladesh and employ over 20 percent of the adult population.
President and Managing Director of Bank Asia Md. Arfan Ali said, “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.”
He went on saying, “We can now provide additional financial support to businesses, particularly to export and import-based SMEs and other corporate clients which ultimately impact 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.