The International Finance Corporation (IFC) has launched an US$80 million short-term liquidity facility to provide banks in Bangladesh with working capital and trade financing capacity.

The funds aim to improve access to letters of credit (L/Cs) and associated services for the country's small- and medium-sized enterprises (SMEs).

New facility

The funding has been made available through the IFC's newly formed Bangladesh Small and Medium Enterprise Liquidity Facility, which the corporation describes as an initiative to help meet funding needs of local banks and small businesses.

The IFC's support has been extended as a result of recent market disruptions in foreign exchange availability in the country.

L/C support

The facility should provide Bangladeshi SMEs - especially those involved in exporting - with continued access to critical funding for timely issuance and discounting of L/Cs.

The IFC has so far signed agreements with three financial institutions - Eastern Bank Limited, BRAC Bank and Southeast Bank Limited - to deliver the facility.

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