IFC invests $25m in Bank Asia to help COVID-hit businesses

Business Desk | Published at 10:02pm on November 29, 2020

IFC, a member of the World Bank Group, is making a fresh investment in Bank Asia in an effort to provide liquidity to businesses hit by the COVID-19 outbreak in Bangladesh and help preserve jobs, said a press release.

IFC’s $25 million loan to Bank Asia will provide critical working capital to help small and medium enterprises and corporate clients to continue their operations.

SMEs comprise over 90 percent of businesses in Bangladesh and employ over 20 percent of the adult population.

‘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,’ said Bank Asia president and managing director Md Arfan Ali.

‘We can now provide additional financial support to businesses, particularly to export and import-based SMEs and other corporate clients which ultimately impacts thousands of suppliers and employees who depend on these businesses.’

The financing package is part of IFC’s $8 billion global COVID-19 fasttrack financing facility, aimed at helping companies stay afloat during the ongoing public health crisis.

This investment comes under the Working Capital Solutions programme 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 Blended Finance Facility is also supporting IFC’s WCS programme 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 IFC Asia and Pacific regional industry director for financial institutions group Rosy Khanna.

IFC is committed to supporting its clients in Bangladesh in this important endeavour through trade finance solutions, Khanna added.