33243 - WCSS AB Bank BSLF III

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Summary of Investment Information

Project Number

33243

Company Name

AB BANK LIMITED.

Date SPI Disclosed

Apr 8, 2013

Country

Bangladesh

Region

South Asia

Projected Board Date

May 16, 2013

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Jun 27, 2013
Signed : Jun 28, 2013
Invested : Aug 21, 2013

Sector

Commercial Banking - Trade and Supply Chain

Project Description

The Project consists of providing a 1 year Short-Term Loan in the amount of upto US$35 million (up to 12 months, renewable up to two times at IFC’s option for an additional 12 months, for a maximum aggregate period of up to 3 years) to AB Bank Limited (“Bank” or “ABBL”) to support the foreign currency needs of SMEs in Bangladesh. The financing provided to ABBL is a fit with the World Bank and IFC strategy of promoting economic growth by providing access to finance to underserved market segments and promoting international trade, thereby leading to improved competitiveness and job retention / creation.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	35.0
Equity

Development Impact

- Financial Sector Deepening: The Project will enable ABBL to access foreign currency funding and compete on a level-playing field with foreign banks that have the benefit of parent funding. The IFC funding will also encourage other international banks / FIs to lend to local banks in Bangladesh.

- Demonstration Effect: The demonstration effect of IFC financing will encourage foreign banks to fund the local banking sector and increase the range and availability of financing options in the market.

- Unique Role in Addressing Trade and Short-term financing gap: IFC will provide critical role in addressing the gap between trade finance demand and global banking capacity amidst the European crisis. This local needs of local SMEs in the absence of other viable commercial lenders.

- Catalytic Role: IFC can bring in other institutions to increase both short-term and long-term liquidity support to ABBL for their financing needs.

E&S Category Rationale / Risks and Mitigation

The project is proposed for supporting the short term finance SME portfolio of the bank. This present minimal E&S risks which can be managed by putting in adequate management actions and systems in place and therefore the project has been classified as category FI-3. The bank will be required to make provisions in its existing Social and Environmental Management System (SEMS) to screen its short term finance decisions against IFC Exclusion list and additional eligibility criteria as needed.

Contacts

For Inquiries About the Project, Contact

Abu Hena Mustafa KamalSenior Executive Vice President & Head of Financial Institutions & Treasury
AB Bank Ltd., 30-31 Dilkusha C/A, Dhaka 1000, BangladeshPhone: +88-02-7171002
Fax: +88-02-9566265
Email: mailto:ahmkamal@abbank.com.bd

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