The International Finance Corporation (IFC) is providing $50 million loan to Brac Bank in order to support small and medium-sized enterprises (SMEs) to emerge from the lingering effects of the Covid-19 pandemic.

This investment will contribute to the preservation of jobs and bring foreign exchange liquidity into Brac Bank to help support the working capital and trade finance requirements of the bank's SME importer- and exporter- clients, according to a press release.

This investment will also send a positive signal to the market and contribute towards attracting additional international investors to support the foreign exchange financing needs of local banks and SMEs.

The financing package is part of IFC's $8 billion global Covid-19 fast-track financing facility to support companies during the ongoing public health crisis. 

Brac Bank is Bangladesh's third largest private bank and the only SME-focused bank in the country.

"Our SME and corporate clients continue to confront challenges arising from the disruptive effects of Covid-19. The insufficient availability of foreign exchange has additionally impeded their regular trading operations," said Selim RF Hussain, managing director and chief executive officer of Brac Bank.

Joon Young Park, IFC's portfolio manager for South Asia, said: "IFC has been supporting the banking sector in export-driven economies like Bangladesh, which have been facing declines in foreign exchange reserves due to various macroeconomic and geopolitical headwinds." 

"IFC plans to continue providing its steadfast support to key banking partners in Bangladesh who have significant SME portfolios, such as Brac, with whom IFC has had equity and debt commitments over the past 19 years."

After three long years of grappling with the impact of the pandemic, businesses in Bangladesh continue to face challenging market conditions, said Martin Holtmann, IFC country manager for Bangladesh, Bhutan, and Nepal.

"By supporting Brac Bank, we are continuing our efforts to help Bangladesh recover and foster a resilient post-pandemic economic landscape."