$15m City Bank-ITFC loans for SMEs

City Bank has entered into a $15 million trade finance partnership with International Islamic Trade Finance Corporation (ITFC) for providing short-term loan facilities to small and medium enterprises.

The SMEs will get the funds through an Islamic banking window for importing raw materials.

The financing of Jeddah-based ITFC, the trade financing arm of Islamic Development Bank (IsDB), comes as part of the IsDB's COVID-19 response strategy, says a press release.

The strategy focuses on providing life-saving support through the provision of medical supplies, staple food and fertiliser for agricultural production to some of the Organisation of Islamic Cooperation countries.

"Supporting the SMEs as they emerge out from the pandemic is ever more critical now as financial resources of OIC member countries are stretched to meet the urgent medical and staple food supplies," said Hani Salem Sonbol, CEO of ITFC.

A central tenet of the ITFC strategy is to provide financing to local partner financial institutions like City Bank to facilitate SME access to financing that is key for the country's economic growth and their ability to participate in global value chains, he said.

"This Murabaha financing facility will enable us to provide better value to our importing clients through extensive links and support of ITFC and IsDB," said Sheikh Mohammad Maroof, additional managing director of City Bank.

"We look forward to seeing the new partnership make a lasting contribution to private sector development and socio-economic growth in Bangladesh," he added.

City Bank is the latest partner institution to work with ITFC as it expands its financing outreach to the private sector through local banks in Bangladesh, according to the statement.