The country’s first private non-banking financial institution IPDC Finance Ltd has gotten the nod for receiving long-term financing from German-based Deutsche Investitions-und Entwicklungsgesellschaft (DEG).
DEG mbH, a subsidiary of KfW, is a European development finance institution for long-term projects and company financing that has been financing and structuring the investments of companies in developing and transition countries in order to contribute to sustainable progress over the last five decades.
The central bank gave the nod to availing financing worth 15 million Euros from DEG to IPDC.
In a filing on the Dhaka Stock Exchange on Tuesday, the non-bank financial institution said the regulator has given its approval through Standard Chartered Bank for availing the loans.
However, the approval was given under certain conditions for which IPDC will have to renegotiate the terms and conditions of the loan with the lender.
“When we sought the financing earlier the rate on Euro was on the negative, which would have been a more sound transaction for us, which currently has changed,” one of IPDC's top brass told Dhaka Tribune.
“The current market value for Euro and the conditions given by the central bank is now making us reconsider if we really need to avail it,” he further said.
According to the top brass, IPDC will be renegotiating the terms and if the terms are preferable the NBFI will be considering availing of the loan.
“DEG’s confidence in the institution should speak for itself and IPDC can generate more revenue through just deposits and the funding sought from foreign sources is just one of the many regular forms of financing we execute,” he further explained.
The value of 500-Euro notes in circulation fell by the most in three years in July, recording its third-largest drop since the European Central Bank (ECB) stopped production at the end of 2018 to prevent and rein in its use for criminal activities.
The decline in 200-Euro notes during the month was the biggest on record.
With Euro rates changing now, IPDC will have to renegotiate and will avail of the loan if it turns out to be sustainable following it.