49301 - SA MSME Facility

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Summary of Investment Information

Project Number

49301

Company Name

SME RESILIENCE RECOVERY FACILITY

Date SPI Disclosed

Dec 7, 2023

Country

Bangladesh

Region

South Asia

Projected Board Date

Dec 22, 2023

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Oct 25, 2025

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Dec 21, 2023
Signed : Dec 9, 2024
Invested : Jun 12, 2024

Sector

Microfinance and Small Business - Non Commercial Banking

Additional Project Attributes

Blended Finance

Project Description

The proposed investment consists of senior unsecured loans of up to US$160 million in the aggregate for the Banks, with each of loan being for a tenor of two years and the option to rollover for an additional two years for a maximum tenor of four years. IFC proposes to make an A loan to each of (i) City Bank Plc, for an amount up to US$50 million; (ii) Prime Bank Plc, for an amount up to US$40 million; (iii) Eastern Bank Plc, for an amount up to US$20 million; and Bank Asia Plc, for an amount up to US$50 million. The aggregate amount of the A loans will not exceed US$160 million. The proposed IFC investment will support working capital and long-term financing needs of MSMEs, including women-owned SMEs.

The projects will be supported by a pooled first loss guarantee of up to US$40 million provided by International Development Agency IDA Private Sector Window Blended Finance Facility (IDA-PSW BFF).

Associated Advisory Engagement

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	200.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Loans to SME Borrowers

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

Expected Development Impact of the Project Project level outcome: Increased access to finance for SMEs Access to finance remains a constraint for growth of SMEs in Bangladesh. According to the IFC MSME Finance Gap study The financing gap for Bangladesh MSMEs is estimated at approx. US $39 billion, equivalent to 20 percent of GDP . Through this project IFC will support the partner banks to provide much-needed liquidity for SMEs, enabling them to grow their SME portfolio and thus increase access to finance for the sector. Market level outcome: Resilience: IFC anticipates that this project by providing access to medium-term funding in USD to financial institutions to support the growth of its SME portfolio, will facilitate these banks’ working capital, trade finance, and foreign currency liquidity needs and strengthen their ability to absorb shocks imposed by the current macroeconomic environment. The project is expected to demonstrate to other investors the viability of supporting financial institutions in Bangladesh by helping the market deal with the growing uncertainty and catalyzing investor response.

IFC's Expected Role & Additionality IFC will be providing medium-term financing in USD with a 4-year tenor that is not readily available in the market. Financing will be needed to support operations and working capital needs of SMEs. IFC’s funding, with its currency/tenor profile, is expected to help the partner banks improve and grow their loan portfolio and increase lending to SMEs despite the ongoing risks from the prevailing global macroeconomic situation. .

E&S Category Rationale / Risks and Mitigation

This Program will support MSMEs through a pre-identified set of banks in select IDA countries. The E&S risks of these activities are typically considered low to medium, although contextual risks present in those countries and poor E&S management can increase the E&S risk. Higher risk transactions will not be eligible and additional sector restrictions may be applicable – the program is therefore categorized as FI-2. The pre-identified clients are either existing clients or former clients with recent IFC projects. IFC will categorize, appraise, and supervise each underlying project individually, consistent with IFC’s existing E&S policies and procedures. This will include review against the applicable IFC Performance Standards, which for financial institutions normally consist of PS1 and PS2, disclosure, and approval.

At appraisal, prior to each individual client’s approval, IFC will review if their ESMS is sufficient to manage the E&S risks associated with the asset class to be supported. Where the need for ESMS improvements is identified, IFC will require corrective actions, as necessary. Applicable E&S requirements for each Project will be IFC’s Exclusion List, national E&S laws, and regulations. Additional E&S requirements may be required depending on the E&S risks identified. IFC will also monitor the ongoing E&S performance of each underlying project by reviewing periodic reports provided by the client, as well as by conducting follow-up supervision visits as needed.

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Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
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Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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