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The German Investment Corporation - DEG and Netherlands Development Finance Company - FMO will provide US$40 million credit to Bangladesh’s Eastern bank Limited for SME and green financing.
In this regard, both the lender signed a Term Facility transaction with Eastern Bank Limited (EBL) recently, said a press release from the DEG.
The credit will be under the long-term foreign currency financing with a five-year tenure aimed at strengthening the balance sheet of EBL further.
The DEG said the loan will be utilised towards SME, Green and Trade Related investments, supporting the efforts of Bangladesh to create jobs for the 2.0 million people entering the labour force every year as well as to combat climate change.
According to the statement, this will be the third agreement between EBL, DEG and FMO.
Despite the uncertainty pertaining to Covid-19 pandemic, this transaction shows the strong commitment of both the DEG and FMO to support a long-standing partner like Eastern Bank Limited, the German private sector development partner said.
A longstanding client since 2012, Eastern Bank is one of the strongest corporate banks in Bangladesh increasingly focusing on the SME and Green segments.
Ms Petra Kotte, Senior Director, Financial Institutions & German Business at DEG said, “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.”
Mr Huib-Jan de Ruijter, member of the Executive Committee and Director FI 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 said, “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 channeling the funds to the most required sectors in Bangladesh. We look forward to closely work with DEG & FMO in the coming days to contribute meaningfully in Bangladesh’s journey to next stage,” he added.