CDC Group, the UK’s development finance institution and impact investor, has announced $30 million trade finance loan to City Bank, a private bank in Bangladesh.
British High Commissioner in Dhaka Robert Chatterton Dickson welcomed CDC’s first ever direct trade finance loan to a bank in Bangladesh.
“This transaction is a significant step forward in the UK-Bangladesh economic partnership, further broadening our offer of financing instruments beyond grant finance,” he said, adding that, “CDC’s growing presence in Bangladesh will offer an additional source of financing to the private sector, bolstering economic growth and the shared prosperity of both the UK and Bangladesh.”
The loan facility will provide systemic liquidity that will support continued import and export activities and help bolster the country’s economic growth.
“This loan to City Bank, which marks CDC’s first direct trade finance loan to a local issuing bank, will further enhance the supply of trade finance in the region,” M. Rehan Rashid, Country Director for Bangladesh, CDC Group, was quoted as saying in a statement.
“We are thrilled that this commitment will support Bangladesh’s banking sector and enhance our ability to bring deeper impact to local and regional value chains,” he said.
CDC is the UK Government’s bilateral development finance institution. CDC’s investment in the UK is on top of the UK Government’s support for economic development in Bangladesh through the UKAid, GuarantCo, UKEF and share in International Finance Institutions’ investments in Bangladesh.
This investment will enable City Bank to extend foreign currency trade credit to local banks as well as local importing and exporting businesses, and is expected to generate up to US$100 million of additional trade every year.
The loan will strengthen City Bank’s ability to meet the needs of its over 17 million clients across retail and small and medium enterprises (SMEs), facilitating increased trade and supporting key sectors of Bangladesh’s economy such as the ready-made garment, manufacturing and food processing and production industries, CDC said in a statement.
Sheikh Mohammad Maroof, Additional Managing Director at City Bank, said: “This loan from CDC will help facilitate trade finance through UPAS LCs which in turn, will enable corporates and SMEs to optimize working capital management at competitive rates during such unprecedented times.”
“City Bank will assist Bangladeshi businesses in meeting exporters’ requirements of payment at sight and, clients’ needs for timely goods receipt while enhancing overall competitiveness in international commercial activities. We are very excited for this new beginning and look forward to a stronger relationship with CDC in near future,” he said.
