CDC Group (“CDC”), the UK’s development finance institution and impact investor, has committed $30 million trade finance loan to Prime Bank Limited (“Prime Bank”), a 2nd generation private commercial bank in Bangladesh. The loan will enhance Prime Bank ability to meet local corporates’ US dollar funding needs, bolstering necessary import and export activities, and supporting the continued growth of Bangladesh’s economy.
CDC’s loan facility will provide Prime Bank with a stable source of much-needed trade finance funding. This liquidity will enable the bank to extend more foreign currency trade credit at longer tenors to local businesses, and the facility is expected to generate up to US$60 million of additional trade every year across key economic sectors such as manufacturing, ready-made garments, and food and agriculture. Availability of greater capital will support businesses’ ability to import the raw materials and capital equipment needed to sustain their operations and output, which will in turn sustain and create more jobs, increase accessibility of goods and services for consumers, and ultimately stimulate other economic activities – contributing to Bangladesh’s GDP growth.
In addition to the financial commitment, CDC will work with Prime Bank to help strengthen the bank’s capacity to identify and manage environment and social risk factors in its operations.
Rehan Rashid, Country Director for Bangladesh, CDC Group, said: “We are pleased to be deepening our support for Bangladesh through our trade finance facility that allows us to remain agile in responding to the critical funding gap in the market. CDC’s partnership with Prime Bank, demonstrates our joint goal of increasing financial inclusion and keeping economic activities flowing in Bangladesh. Combating the adverse effect of the pandemic on trade activities and economic growth calls for collaboration and stable investments in form of counter-cyclical funding which is bespoke to the needs of local businesses and suited to countries’ economic structure. We are thrilled to be backing a key Bangladeshi financial institution that will help accelerate capital support to local communities, boost businesses and economic opportunities, and facilitate the country’s post-crisis recovery.”
Hassan O. Rashid, Managing Director & CEO of Prime Bank, said: “The partnership with CDC is indeed a very timely initiative. This collaboration shall enable Prime Bank to address the need of Corporate and SME clients in the post-Covid business environment. Furthermore, the alliance shall provide liquidity support to our international trade business and help us to migrate some of the best international practices to strengthen our corporate governance.”
HE Robert Chatterton Dickson, The British High Commissioner to Bangladesh, said: “This new trade finance loan by the UK’s bilateral investment arm, CDC, will act as a stimulus to the growth of Bangladesh’s GDP by providing much needed support to key economic sectors. It underlines the UK’s commitment to accelerating economic recovery in Bangladesh by improving private sector access to finance. I wish CDC and Prime Bank a successful partnership.”
