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Mutual Trust Bank Limited (MTB) and German-based factoring company Tradewind GmbH (Tradewind) have inked a bi-lateral “Agreement for Business Collaboration” on July 06, 2020, to offer a first-of-its-kind factoring solution for Bangladesh exporters. MTB Managing Director & CEO, Syed Mahbubur Rahman and Tradewind Managing Director & CEO, AnsgarHuetten signed the agreement on behalf of their respective organization.
According to a research by the Bangladesh Institute of Bank Management (BIBM), exports under Sales Contract constitute 30-40% of Bangladesh trade over the last seven years. But the inherent fact is that globally reputed buyers have made a significant paradigm shift over to contract-based imports from the previously widely used yet costlier documentary credits.
In light of this, exports against Sales Contract is a fast-growing development for Bangladesh exporters. In adherence to the recently introduced Bangladesh Bank circular, the alliance between MTB and Tradewind will support the Bangladesh export community by providing non-recourse finance facilities that will allow for the acceleration of payments from international Buyers which would have otherwise been affected on deferred basis.
Syed Mahbubur Rahman, Managing Director and CEO of MTB stated, “We strongly believe this guaranteed financing arrangement will provide our exporters better cash flow management and provide them with a competitive edge for expansion of export business in many folds”.
The Managing Director & CEO of Tradewind GmbH Mr.AnsgarHuetten opined that “Given international trade advances involving increased trade on open credit, recent directives from the Central Bank of Bangladesh on the allowance of exports on open-account terms, is both timely and befitting. Exports conducted under open-account credit terms against payment risk coverage, with the option for early payment arrangements on non-recourse basis, will not only allow Bangladeshi exporters easy access to finance, but will also assist with minimizing credit risk.”