Bangladesh’s City Bank clinches $30m trade finance loan with UK’s CDC
It will be used to extend foreign currency trade to local banks and businesses.
Bangladesh’s City Bank has secured a $30m trade finance loan from CDC Group, UK’s development finance institution and impact investor.
CDC’s investment will reportedly 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 $100m of additional trade every year, according to the press release.
The loan is expected to strengthen City Bank’s ability to meet the needs of its over 17 million clients across retail and small and medium enterprises, facilitating increased trade and supporting key sectors of Bangladesh’s economy such as the ready-made garment, manufacturing and food processing, and production industries, CDC Group added.
CDC added that the loan aims to close the gap by providing a stable source of trade finance funding that will keep trade flowing across the country, as well as provide a much-needed dollar supply to stimulate Bangladeshi trade.
Trade is an essential driver of Bangladesh’s export-oriented market, but the country has reportedly struggled to find stable sources of short-term funding especially in recent months, with the COVID-19 pandemic having further tightened access to foreign currency funding.
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 UKAid, GuarantCo, UKEF, and share in International Finance Institutions’ investments in Bangladesh.
Photo courtesy of Cytonn Photography (Unsplash)