Provide incentives for sustainable practices across all industries

TDS: IPDC has been recognised as a top performer in the 'Sustainability Rating 2023' by Bangladesh Bank. What are the most innovative and impactful sustainable financing products or strategies that contributed to this achievement?

Rizwan Dawood Shams (RDS): Being recognised as one of the top performers in the 'Sustainability Rating 2023' by Bangladesh Bank is undoubtedly an immense honour for IPDC Finance. While sustainability is at the heart of our core strategy, we took our efforts to the next level in 2023.

IPDC has invested heavily in building the capacity of its employees to become sustainability ambassadors, with relationship managers trained on green and other sustainable finance products and effective communication with customers. In sustainable financing, we focused particularly on green financing, including renewable energy, energy efficiency, and factory safety initiatives. In addition to bolstering our CMSME lending portfolio, IPDC has also supported women entrepreneurs with its specialised product 'Joyee,' offering loans at lower rates than the market average and holding workshops and training sessions on entrepreneurship.

We also enhanced our core banking resilience. Our focus has been on integrating sustainable practices into everything we do—not as additional tasks but as a core part of our strategy. For the past ten years, we have maintained IPDC's NPL ratio below 5%, an achievement we take great pride in. In 2023, our capital adequacy ratio was over 18%, well above the regulatory requirement, which highlights our strong financial health.

Our commitment to diversity and gender equality is reflected not just in our business, but also in our workforce, with around one-fourth of our management and broader team comprising female colleagues.

IPDC has also undertaken several in-house green initiatives, such as transitioning to a digital credit approval system and memo management system. As a result, we managed to cut utility expenses by over 15% and printing expenses by over 20%, demonstrating our commitment to making sustainability a central part of everything we do.

TDS: What future plans does IPDC have to further enhance sustainability within the financial sector?

RDS: Sustainable financing is essential for nation-building and securing the future for the next generation. At IPDC Finance, we are committed to realigning our strategies to support national development and empower the youth. One of our key objectives moving forward is to continue raising awareness among our customers, with a particular focus on CMSMEs. By helping them adopt more sustainable practices, we aim to contribute to economic growth and enhance economic resilience.

IPDC will continue to bolster its green financing portfolio. We are exploring new opportunities, including financing energy-efficient projects, green transportation, and green construction. We also intend to leverage digital technology for sustainable financial solutions, especially for underrepresented markets. IPDC remains supportive of women entrepreneurs as well. With our specialised product for women entrepreneurs, 'Joyee,' we not only provide financing options but also offer upskilling and business support to help them grow their ventures.

Our CSR initiatives will also continue to play an instrumental role. As a responsible corporate citizen, IPDC remains committed to undertaking projects with special attention to those addressing climate change. CSR has been a key element of our overall strategy, contributing significantly to the recognition we have achieved. For example, in collaboration with a leading NGO, IPDC executed a rainwater harvesting project for climate-vulnerable communities, benefiting over a hundred people in 2023. These efforts have been immensely rewarding and have allowed us to make a meaningful impact in promoting sustainability.

Collaboration with various stakeholders is crucial for further advancing sustainability across the financial sector. We aim to strengthen the sustainability ecosystem by working with different types of stakeholders—both national and international.

TDS: What forms of government support would be most effective in advancing the efforts in sustainable finance?

RDS: The government has already made significant strides in supporting sustainability, and we have seen its impact in the financial sector. In particular, Bangladesh Bank's commitment to sustainable finance has inspired IPDC to scale up its efforts and create meaningful change. To enhance our initiatives further, there are a few key areas where additional support would be invaluable.

Expanding the regulatory framework to provide incentives for sustainable practices across all industries could increase the drive for sustainable projects throughout the economy, further accelerating our efforts. Introducing additional refinancing schemes and enhancing funding options would be extremely beneficial not just to financial intermediaries but also to end borrowers. Simplifying and optimizing approval processes would also expedite our overall progress, attract more investment, and open doors to partnerships, providing us with the resources needed to scale our efforts.

Moreover, increasing awareness and education around sustainable finance is critical. Government-led campaigns and educational programmes that promote the importance of sustainability in the financial sector would not only benefit institutions like ours but also empower the broader population to make informed financial decisions that support sustainable development. Educating the public and future leaders about the importance of sustainability can drive broader adoption.