The Belgian Investment Company for Developing Countries (BIO) has extended a $15 million loan facility to Bangladesh-based Mutual Trust Bank (MTB).
According to a statement, the transaction marks the development finance institution’s first foreign currency transaction in the South Asian country.
BIO said in its statement that the loan will directly support the expansion of MTB’s portfolio dedicated to micro, small, and medium enterprises (MSMEs) and sustainable financing initiatives. This, in turn, will foster business growth and create new job opportunities.
“This comprehensive approach also promotes financial inclusion, ensuring that underserved populations can participate in the formal economy,” the Belgian investor added.
“This financing represents a landmark for MTB’s engagement with foreign development finance institutions and provides much-needed USD liquidity in a challenging foreign exchange landscape,” said MTB managing director and CEO Syed Mahbubur Rahman.
BIO will also provide technical assistance to the Bangladeshi bank to address gender equality within its operations and lending practices.
Indian financial advisory firm TSW Capital Services advised on the transaction.
MTB secured an $8 million loan from the Swiss Investment Fund for Emerging Markets (SIFEM) in May.
Listed on the Dhaka stock exchange, the bank had bagged a $20 million debt facility from Norfund in 2018. In 2019, the Norwegian investment fund became MTB’s single largest shareholder, with a 9.5% stake.
In other recent deals in the country, the International Finance Corporation (IFC) approved a loan of up to $30 million to DBH Finance, the country’s largest housing finance institution, to grow its affordable housing portfolio.
The World Bank Group member was also recently reported to be mulling a loan of up to $50 million for Bangladesh-based City Bank. IFC had extended debt financing of up to $30 million to the lender in 2020.
