This is the second bank through which the WB arm is channelling the aid
International Finance Corporation, the private sector arm of the World Bank Group, is set to provide $25 million to Bank Asia to extend critical working capital to help small and medium enterprises (SMEs) and corporate clients to continue their operations.
The move is expected to help preserve jobs at SMEs, which comprise more than 90 per cent of businesses in Bangladesh and employ upwards of 20 per cent of the adult population.
Earlier in July, IFC had extended $30 million to City Bank for the same end.
“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, director of the IFC’s Financial Institutions Group – Asia and Pacific, in a press release.
The financing package is part of the IFC’s $8 billion global COVID-19 fast-track financing facility aimed at helping companies to stay afloat during the ongoing public health crisis.
The investment came under the Working Capital Solutions (WCS) 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 (IDA PSW) Blended Finance Facility is also supporting IFC’s WCS programme with the first-loss guarantee of up to $215 million in eligible countries, including Bangladesh.
The funds would enable Bank Asia, an IFC client since 2014, to extend critical working capital and trade finance in the form of foreign currency liquidity to affected businesses.
“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,” said Md. Arfan Ali, president and managing director of Bank Asia.