IFC in Bangladesh: Growth amid Challenges

With almost half its population living below the poverty line, Bangladesh faces enormous challenges. IFC is providing investments and advisory services to key industries, helping the private sector do its part to improve lives.

"Bangladesh continues to show outstanding resilience," said Lars Thunell, IFC Executive Vice President and CEO, noting that the country is struggling to rebuild livelihoods after the recent cyclone and grappling to improve infrastructure while establishing a framework for robust economic growth. Thunell is visiting to see the country's needs and IFC's activities first-hand.

Opportunity Beckons

For all the challenges it faces, Bangladesh can aspire to join the ranks of middle-income countries by 2020. Growth stands at 6.6 percent, and the economic fundamentals are in better shape today than in the recent past, with a stable exchange rate and rapidly growing remittances (currently over $5 billion).

The private sector has played a key role in Bangladesh's development progress, by responding to market incentives and leveraging opportunities. Garment exports, in particular, continue to grow at a steady clip, in the range of 15 to 20 percent.

But to cut poverty and raise living standards, the country needs to accelerate growth further and sustain it for years to come. IFC believes that, with the right policy environment, the private sector can continue to lead this growth.

IFC's Expanding Role

Bangladesh is high on IFC's poverty reduction agenda. We are committed to helping develop key sectors of the economy with a combination of investments and advisory services.

IFC investments focus increasingly on: Private infrastructure Energy, including investments in gas production and related infrastructure Manufacturing and service sector companies Innovative private sector–sponsored projects in health and education

Our committed portfolio in Bangladesh stands at $167 million in 13 projects across sectors ranging from financial institutions to general manufacturing, telecommunications, and infrastructure.

Investments in our pipeline include a partial credit guarantee to BRAC, a nongovernmental organization that provides microfinance, and an investment package to the Bangladesh National School. We are working on other investments in health care, infrastructure, agribusiness, financial markets, and microfinance, as well as exploring options to invest further in telecommunications.


To promote the growth of small and medium enterprises, IFC Advisory Services in the region—the IFC SouthAsia Enterprise Development Facility—is helping improve access to finance; strengthening financial institutions, including the country’s central bank; developing the garment, IT, light engineering, and agribusiness sectors; and helping create an enabling environment for businesses.

IFC's advisory staff are working closely with the government to speed procedures for registering businesses and promote transparency in the process. With Bangladesh Bank, IFC helped identify and address five core risk areas where bankers needed training.

With donor support for a second five-year phase of advisory work, IFC will continue to help financial intermediaries, smaller businesses, and the professional service firms that support such businesses.

Innovation at Work


IFC's advisory work in Bangladesh's ready-made garments sector has helped preserve and generate jobs while stimulating growth and improving working and environmental conditions. The sector generates nearly $9 billion in sales per year and accounts for 75 percent of the country's total foreign currency earnings. It employs 2.2 million workers, 85 percent of whom are women. The industry comprises 4,000 factories, and 90 percent of these are small businesses.

To help less-educated workers learn about social and environmental standards, including their rights and responsibilities as employees, IFC and partners have developed street plays and theater to convey essential information. This also helps communicate the benefits of improving productivity in the garment industry.

After seeing a worker-education performance on his visit to a garments factory in Dhaka, Thunell said, "It is great to bring such a performance to the factory floor. It is an effective tool for increasing awareness of work environment and sustainability issues and paves the way for an open dialogue."

IFC's advisory team plans to use this format in the light engineering sector as well, with a focus on occupational safety and health.

The Investment Climate

Strengthening the business investment climate is critical to Bangladesh's future. IFC has established Bangladesh Investment Climate Fund with support from donor partners, the U.K. Department for International Development and the European Union. The objective is to help the government establish business-friendly policies, laws, and regulations and strengthen the institutions that implement them.

Work is underway in close collaboration with the country's private sector and civil society. A program of quick wins for the Regulatory Reform Commission centers on indicators from IFC and the World Bank's Doing Business report. This effort has set up a public-private forum, the Bangladesh Better Business Forum, to help the government update regulations and make it easier to do business. For more information contact: Minakshi Seth Communications Officer E-mail: mseth@ifc.org