Industries hit hard due to the onslaught of the pandemic are all set to benefit from USD 30 million World Bank loan to Bangladesh's BRAC Bank, reports UNB.
The loan from the International Finance Corporation, a member of the World Bank Group, will help both the small and medium-sized enterprises (SMEs) as well as large corporations in Bangladesh stay afloat amid the Covid-induced economic slowdown.
The investment will help to keep businesses open and preserve jobs, which is critical to sustaining the Bangladeshi economy, according to a release.
The package is, in fact, part of IFC's USD 8 billion global Covid-19 fast-track financing facility to support companies during the ongoing public health crisis.
This new investment comes under the Working Capital Solutions (WCS) programme of the Covid-19 response envelope, which is providing USD 2 billion globally to emerging-market banks, enabling them to support struggling firms.
This project will also be supported by the International Development Association's Private Sector Window Blended Finance Facility, which is also supporting IFC's WCS programme with a first-loss guarantee of up to USD 215 million in eligible countries.
With the financing, BRAC Bank is expected to extend loans to its SME and corporate customers, supporting businesses that are now coping with a new wave of Covid-19 in Bangladesh.
"BRAC Bank promotes businesses of all sizes but as the pioneer of SME banking, we are particularly conscious of the needs of SMEs and micro-enterprises that play a vital role in driving economic growth and employment-generation," said Selim RF Hussain, managing director and CEO of BRAC Bank.
SMEs make up over 90 per cent of businesses in Bangladesh and employ over 20 per cent of the adult population. Their cash flows have been heavily disrupted by the ongoing pandemic.
An IFC survey last October showed nearly a third of workers in Bangladesh's micro, small and medium sized enterprises were jobless at the time, due to the Covid-induced financial downturn.
In Bangladesh, IFC has provided a total of USD 260 million in working capital solutions to banks and liquidity support to companies since the beginning of the Covid-19 crisis, including this new funding to BRAC Bank.