IFC offers $40m loan to lower middle-income group

The International Finance Corporation (IFC) has proposed investing up to US$ 40 million in a state-run financial entity in the form of loans to the lower middle-income people in Bangladesh, officials said.

According to its Articles of Agreement, the private sector lending arm of the World Bank (WB) needs to take prior permission from the member state concerned if it wants to finance an enterprise in the territories of that country.

The IFC, according to an available note, wants to invest US$ 40 million in Infrastructure Development Company Limited (IDCOL) to help it provide loans to the lower middle-income people.

"The IFC is considering an investment in IDCOL finance limited to support the company's provision of mortgage loans to the lower middle-income segment in Bangladesh. IFC's proposed investment will consist of a loan of up to US$ 40 million equivalent in BD taka," according to the sister concern of the WB.

Of the total proposed loan, the IFC wants to provide US$ 20 million in tranche in the next few months and the rest of investment in about a year.

The corporation has made the proposal to the Economic Relations Division (ERD) in this regard. The ERD has sought opinions from the finance ministry, an ERD source concerned said.

According to statistics available with the IFC, until June 2017, its committed portfolio in Bangladesh reached over US$ 1.0 billion.

Recently, the lender has sought the government's approval for investing US$ 72 million in two local conglomerates -Pran Agro Business Ltd, Pran Agro Ltd and Natore Agro Ltd and Esquire Knit Composite Ltd- to make sure that both groups get working capital.

In the recent past, the IFC injected US$ 125 million into Summit Power. It also invested in various banks, non-bank financial institutions, power plants and in the hospitality sector of the country.

The corporation promotes sustainable growth and private sector development in Bangladesh through investing in critical infrastructure, boosting financial inclusion, enhancing textiles competitiveness and supporting reforms to make doing the business easier for the private sector.

In late 2016, the IFC set a target to invest US$ 2.5 billion in three years in Bangladesh under long-term financing.

ERD secretary Kazi Shofiqul Azam could not be reached over phone for his comments in this regard.

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