UK’s CDC Group to invest $30mn in City Bank
BI Report || BusinessInsider
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CDC Group, the UK’s development finance institution and impact investor, has announced to provide a $30-million trade finance loan to City Bank, one of Bangladesh’s leading private banks.
The loan facility will provide systemic liquidity that will support continued import and export activities and help bolster the country’s economic growth, the bank said in a statement on Wednesday.
CDC’s investment will enable City Bank to extend foreign currency trade credit to local banks as well as local importing and exporting businesses, and is expected to generate up to $100 million of additional trade every year.
The loan will strengthen City Bank’s ability to meet the needs of its over 17 million clients across retail and small and medium enterprises (SMEs), facilitating increased trade and supporting key sectors of Bangladesh’s economy such as the ready-made garment, manufacturing and food processing and production industries.
M Rehan Rashid, Country Director for Bangladesh, CDC Group, said: “This loan to City Bank, which marks CDC’s first direct trade finance loan to a local issuing bank, will further enhance the supply of trade finance in the region”.
“CDC is committed to offering patient and stable trade finance funding that will facilitate continued supply of goods and services – helping Bangladeshi businesses grow and remain resilient throughout and beyond the Covid-19 pandemic,” said Rashid.
Sheikh Mohammad Maroof, additional managing director of City Bank, said this loan from CDC will help facilitate trade finance through UPAS LCs, which in turn, will enable corporates and SMEs to optimise working capital management at competitive rates during such unprecedented times.
“City Bank will assist Bangladeshi businesses in meeting exporters’ requirements of payment at sight and clients’ needs for timely goods receipt while enhancing overall competitiveness in international commercial activities. We are very excited for this new beginning and look forward to a stronger relationship with CDC in near future,” Maroof said.
Robert Chatterton Dickson, British high commissioner to Bangladesh, welcomed the CDC’s first ever direct trade finance loan to a bank in Bangladesh.
“This transaction is a significant step forward in the UK-Bangladesh economic partnership, further broadening our offer of financing instruments beyond grant finance,” he said.
CDC is the UK Government’s bilateral development finance institution. CDC’s investment in the UK is on top of the UK Government’s support for economic development in Bangladesh through the UK Aid, GuarantCo, UKEF and share in International Finance Institutions’ investments in Bangladesh.