Mutual trust bank

Debt : May 2024

BIO has granted a USD 15 M loan to Mutual Trust Bank, a commercial bank in Bangladesh

Amount

$ 15,000,000.00

Type of investment

Debt

Development impacts

Local economic growth
Private sector consolidation/innovation
Gender

Beneficiary locations

Asia: Bangladesh

Investment field

Financial Institutions

Activity

KK.64.190 Commercial banking

Organisation

Mutual trust bank

Website

https://www.mutualtrustbank.com/

Domicile

Bangladesh

Mutual Trust Bank (MTB) is an innovative and robust commercial bank that was founded in 1999. Initially a wholesale bank, following the arrival of a new CEO in 2019, the bank has reshaped its strategy to focus more on Cottage, Micro, Small & Medium Enterprises (CMSMEs). End of 2022, the bank had funded 8,217 microentrepreneurs and 6,800 SMEs (45% of the funded companies are CMSMEs). MTB is among the country’s top banks, and has a pan-Bangladesh presence managing a network of 120 branches & 39 Sub branches, 200 Agent Banking Centers and 8 Air Lounges across the country.

Development impacts

Local economic growth
Increased lending to SME (currently around USD 224 M), with a focus on financing productive activities (ca. 92% of total portfolio). The use of BIO's funds will contribute to an increase in SME exposure. By offering non-financial services, MTB aims to double the number of people trained (from ca. 1,064 to 2,050).
Private sector consolidation/innovation
Supporting the best-in-class financial institution on the market in terms of digitalisation and efficiency. Helping MTB consolidate its strategy to become a more specialized SME bank with a clear focus on productive sectors and while improving its distribution channels and distribution of new products.
Gender
MTB is eligible on the 2X Consumption criteria ("MTB Angona" is a dedicated Women Banking department) and has demonstrated an intent to improve on the matter.

E&S Impact

MTB has agreed to reinforce the E&S capacity for all teams involved with the E&S process, as well as to develop of a Gender Strategy to consolidate current practices and support opportunities for improvement. They will also continue the implementation of the recommendations suggested by an external assessment on their ESMS process.

Situation at the time of investment

MTB has a well-established ESMS and E&S capacity allowing for an effective compliance-based E&S risk management. MTB has a good set of HR policies with some focused gender initiatives. MTB is motivated to continue improving their E&S practices and standards.

Risk Category: A