IFC proposes $40m investment in Bangladesh’s IDLC Finance

Photo by Adrien Taylor on Unsplash

The International Finance Corporation (IFC), the private investment arm of the World Bank, has proposed to provide up to $40 million in senior financing in IDLC Finance Ltd (IDLC), the largest non-banking financial institution in Bangladesh.

In a pre-investment disclosure, IFC said the proceeds, which will be in Bangladeshi Taka equivalent, will be utilized by IDLC for supporting affordable housing finance for purchase or construction and extension of houses to individuals under low and medium income group in Bangladesh.

Registered with the Bangladesh Bank, the country’s central bank, IDLC has a substantial SME portfolio and presence in tier II and tier III cities across the country.

It was the first Bangladeshi leasing company established in 1985 through the alliance of IFC, DEG, Kook-min Bank and Korean Development Leasing Corporation of South Korea, the Aga Khan Fund for Economic Development, the City Bank Limited, IPDC of Bangladesh Limited, and Sadharan Bima Corporation.

IFC was one of the original sponsors of IDLC. IFC invested BDT25 million ($301,000) to pick up a 10 per cent stake in IDLC before fully divesting from the latter in 2005. Currently, there are ongoing advisory projects with IDLC via FIG.

The proposed IFC investment will be for a longer tenor than is currently available to IDLC, at seven years.

IFC expects the proposed investment to provide commercially viable affordable housing finance product that can open up a new frontier segment for financial institutions contributing to the financial sector development and create additional jobs.

“Real estate & housing industry is one of the largest job creators in Bangladesh. By supporting the expansion of housing finance, this project will also contribute to job creation in Bangladesh,” IFC said in its disclosure.

The project will be supported by the Local Currency Facility of the IDA18 IFC-MIGA Private Sector Window (PSW), created by the World Bank Group to catalyze private sector investment in IDA countries, with a focus on fragile and conflict-affected states.

“The Local Currency Facility will help deepen the housing market by supporting longer-term local currency lending, and will contribute to making homeownership more affordable thanks to the extension of mortgage loans maturities,” IFC said.

Also Read:

IFC proposes to invest up to $75m in India’s L&T Housing Finance

AIIB approves $285m in loans to Bangladesh for power projects

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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).

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  • 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.