IFC provides $50m for Prime Bank

To support export and import-based businesses to cope with global uncertainties brought on by the Covid-19 pandemic, IFC is providing $50 million to Prime Bank Limited in Bangladesh.

This IFC funding will support working capital, trade finance, and foreign exchange liquidity needs of export and import-based entities borrowing through Prime Bank’s offshore Banking Unit.

The financing package is part of IFC’s ‘Fast Track Covid-19 Facility,’ a package designed to support countries and private sectors to cope with the impacts of the pandemic under the Working Capital Solutions (WCS) program, read a press release.

This IFC engagement with Prime Bank will also be supported by the International Development Association’s Private Sector Window Blended Finance Facility. Commercial banks are the largest providers of working capital and foreign exchange trade finance support to manufacturing and infrastructure businesses, key drivers of Bangladesh’s economy.

Unexpected turbulence in the global markets because of the Russian invasion of Ukraine and the resulting war has restrained the foreign exchange liquidity in the market. With this funding, Prime Bank is expected to extend loans to its export and import-based customers, helping to keep businesses afloat, to resume exports and preserve jobs.

“IFC’s support reflects the resilience of the Bangladeshi economy and the confidence of the Prime Bank. IFC has been a valuable partner of Prime Bank since 2014 and this relationship helps us to significantly expand our OBU business,” said Managing Director and CEO of Prime Bank Hassan O Rashid.

“We are really thankful to IFC for its continued support. This fresh funding of $50 Million targeted for SME clients will help us grow the SME portfolio of the bank,” he added.

Prime Bank is one of the leading commercial banks in Bangladesh. It was awarded the “2021 Best Bank Partner for Equipment Trade in South Asia” by IFC under its Global Trade Finance Program (GTFP).

This project is IFC’s 4th WCS facility to Prime Bank, supporting a long-standing partner bank’s ability to provide critical financing services and promote the resilience of the trade finance market in Bangladesh.

“It is clear the impacts of Covid-19 are still being felt by a number of businesses in Bangladesh’s key industries, effectively constraining their operating ability,” said IFC Regional Industry Director, Financial Institutions Group Allen Forlemu.

“This funding package is designed specifically to help ensure businesses in Bangladesh can continue to trade and have access to working capital, helping them maintain operations and preserve jobs,” Added Allen.

“Small and medium-sized businesses, which are the backbone of the country, have been particularly impacted by the pandemic and are expected to benefit the most from this IFC funding,” he added.

IFC has provided a total of $310 million in working capital solutions to banks in Bangladesh and liquidity support to companies since the beginning of the Covid-19 crisis, including this new funding to Prime Bank.