IFC, HSBC Bangladesh plan to establish $200m risk sharing facility

A Swiss International aircraft flies past the HSBC headquarters building in the Canary Wharf financial district in east London February 15, 2015. REUTERS/Peter Nicholls

The International Finance Corporation (IFC), the private investment arm of the World Bank Group, has proposed to partner with HSBC Bangladesh to establish a $200 million risk sharing facility (RSF).

IFC’s share in the RSF will be 50 per cent i.e. its maximum exposure will not exceed $100 million equivalent, it said in a disclosure dated February 27.

Typically, an RSF is a bilateral loss-sharing agreement between IFC and an originator of assets in which IFC reimburses the originator for a portion of the principal losses incurred on a portfolio of eligible assets. The originator may be a bank or a corporation

The proposed RSF with HSBC Bangladesh will support the latter to extend additional finance to its existing clients in sectors which have significant impact on the growth of the country’s economy and are also of strategic importance and relevance to IFC, namely agribusiness, power, climate/clean energy, ready made garment and pharmaceuticals, it added.

Improved availability of credit to these sectors is expected to benefit consumers, producers and buyers along the value chain and therefore support economic growth, increase employment and encourage the generation of higher income in these sectors, IFC said.

In addition, it will support key local industries as ultimate recipients of funds under this project would be buyers of raw materials, processors and manufacturers in order to support their future growth.

HSBC is incorporated in Hong Kong and its ultimate holding company HSBC Holdings Plc is incorporated in London. Listed on the London, Hong Kong, New York, Paris and Bermuda stock exchanges, shares in HSBC Holdings Plc are held by more than 204,000 shareholders in 133 countries and territories.

The bank operates in Bangladesh through its branches and offers a range of financial services including commercial banking, retail banking, liquidity and cash management, trade & receivable finance, global markets & security services.

Over the years, IFC has drawn on its global and local experience and has provided a combination of investments and advisory services in Bangladesh. As of June 2017, IFC’s committed portfolio in Bangladesh is over $1 billion.

It recently proposed to provide up to $40 million in senior financing to IDLC Finance Ltd (IDLC), the largest non-banking financial institution in Bangladesh. In November last year, IFC said it is considering extending up to $40 million in a short-term loan to Dhaka-headquartered BRAC Bank Ltd. In August, it proposed an investment of around $2-3 million in online grocery supplier Chaldal Inc.

Also Read:

IFC mulls extending $40m loan to Dhaka-based BRAC Bank

IFC may invest up to $3m in Bangladeshi online grocery firm Chaldal

 

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

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Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.