news - DEG and FMO support Covid-19 affected SMEs in Bangladesh

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DEG and FMO support Covid-19 affected SMEs in Bangladesh

July 20, 2020

DEG and FMO sign a USD 40 mln Term Facility transaction with Eastern Bank Limited (EBL).

EBL is one of the strongest corporate banks in Bangladesh increasingly focusing on the SME and Green finance segments. The funding will be utilized towards SME, Green and Trade Related investments, supporting the efforts of Bangladesh to create jobs for the 2 million people entering the labour force every year as well as to combat climate change.

This is the third time an agreement has been signed between EBL, DEG and FMO. Despite the uncertainty pertaining Covid-19, this transaction shows the strong commitment of both DEG and FMO to support a long-standing partner like EBL. The long-term foreign currency financing with five-year tenor will further strengthen the balance sheet of EBL.

The Dutch fund Actiam has also increased its investment in Eastern Bank by adding a USD 3 mln participation in the transaction to its existing exposure.

“With this commitment we support a successful local commercial bank to carry on its lending business for small and medium enterprises even in the current situation. At the same time we promote trade between Germany and Bangladesh”, said Ms. Petra Kotte, Senior Director, FI & German Business at DEG.

Huib-Jan de Ruijter, member of the Executive Committee and Director Financial Institutions at FMO said: “We are glad to support a key partner in Bangladesh such as Eastern Bank to further promote the SME and Green segment particularly during these times of increased operational challenges posed by Covid-19.“

EBL’s Managing Director & CEO Mr.  Ali Reza Iftekhar states “This is yet another major milestone for all the parties affiliated in this deal. It reflects the long standing partnership EBL has nurtured with DEG & FMO. Through this agreement, we can ensure channelling the funds to the most required sectors in Bangladesh. We look forward to closely work with DEG and FMO in the coming days to contribute meaningfully in Bangladesh’s journey to next stage.”

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Virtual signing ceremony with representatives of DEG, FMO and EBL

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