UK-based finance institution CDC Group has committed a $30 million trade finance loan to Prime Bank Limited.

The loan will enhance the ability of the Bangladeshi bank to meet the US dollar funding needs of local corporates, bolstering necessary import and export activities, the bank said in a statement yesterday.

The loan facility will provide Prime Bank with a stable source of much-needed trade finance funding, according to the statement.

The liquidity will also enable the bank to extend more foreign currency trade credit with longer tenures to local businesses, and the facility is expected to generate up to $60 million of additional trade every year across key economic sectors such as manufacturing, readymade garments, food and agriculture, it said.

"CDC's partnership with Prime Bank demonstrates our joint goal of increasing financial inclusion and providing agile counter-cyclical funding in response to the funding gap in the market," said M Rehan Rashid, CDC Group's country director for Bangladesh.

"We are thrilled to be backing a key Bangladeshi financial institution that will help accelerate capital support to local communities, boost businesses and economic opportunities."

Hassan O Rashid, managing director and chief executive officer of Prime Bank, said the partnership with CDC is indeed a very timely initiative.

This collaboration shall enable Prime Bank to address the need of corporate and SME clients in the post-Covid business environment, he said.

"Furthermore, the alliance shall provide liquidity support to our international trade business and help us to migrate some of the best international practices to strengthen our corporate governance."

Robert Chatterton Dickson, British high commissioner to Bangladesh, said this new trade finance loan by the UK's bilateral investment arm, CDC, will act as a stimulus to the growth of Bangladesh's gross domestic product by providing much needed support to key economic sectors.

"It underlines the UK's commitment to accelerating economic recovery in Bangladesh by improving private sector access to finance. I wish the CDC and Prime Bank a successful partnership," Dickson said.