DHAKA: International Finance Corporation (IFC), a member of the World Bank Group, has launched a trade finance facility with local apparel manufacturer MBM Group.
This is IFC’s first transaction in Bangladesh under the IFC Global Trade Supplier Finance program, and it will help MBM Group expand its international trade footprint.
IFC will provide a supplier finance credit line to MBM Group, says a release delivered to media on Wednesday.
The company will receive funding from IFC backed by receivables from international buyer Levi Strauss& Co, freeing up working capital for the MBM Group.
Supplier finance is a scalable way for suppliers in emerging markets to access affordable financing for their receivables over a period defined by the terms of credit.
The arrangement enables buyers to negotiate longer payment terms or better prices.
Wasim Rahman, Managing Director of MBM Group, said, ‘By partnering with IFC, we are paving the way for others in the sector to avail of the facility and obtain affordable short-term finance’.
M Zubair Aslam, director of product development and sourcing at Levi Strauss & Co. said, ‘IFC’s trade supplier finance program helps our suppliers in emerging markets gain access to capital at reasonable rates, leading to new growth opportunities, positioning them better to compete in the global marketplace’.
Kyle F Kelhofer, IFC Country Manager for Bangladesh said, ‘The textile sector plays a central role in employment, particularly for women, in Bangladesh. Through IFC’s trade supplier finance program, suppliers like MBM Group will be able to access much-needed financing and grow their business while effectively managing risk’.
IFC launched this facility in Bangladesh in partnership with GTNexus, a cloud-based business network and platform for global trade and supply chain management.
The platform enables participants to operate against a core, real-time set of information across multiple supply chain functions. This optimizes the flow of goods, funds and trade information.
Bangladesh’s textile sector employs four million people and contributes one-fifth of the country’s GDP. IFC’s support to the sector includes its engagement through the Better Work joint-venture program with the International Labour Organization.
IFC also provides energy and water efficiency related advice and supports selected garment manufacturers with long-term financing, the release says.
Established in 2010, IFC’s Global Trade Supplier Finance program is a $500 million multicurrency investment and advisory program that provides short-term finance to emerging-market suppliers and small and midsized exporters.
According to the release, IFC’s total investment in Bangladesh for fiscal 2012-2013 was approximately $774 million. IFC supports the textile sector in Bangladesh though investments and advisory assistance.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector.
Working with private enterprises in more than 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity.
In FY13, our investments climbed to an all-time high of nearly $25 billion, leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges.
For more information, visit www.ifc.org.
BDST: 1417 HRS, JUNE 25, 2014
