Stockholm (Nordsip) – When considering where to invest for impact, investors often channel their funds towards developing countries, where they can find high additionality and competitive returns. As one of the world’s most densely populated and climate-vulnerable countries, Bangladesh combines robust economic growth with urgent development and climate needs, including widespread poverty, limited access to healthcare, exposure to rising sea levels, limited clean energy assets and underinvested infrastructure.
To this end, Swedfund announced it provided a US$20 million loan in Mutual Trust Bank PLC (MTB), a private commercial bank headquartered in Dhaka, Bangladesh. MTB will use the funds from this investment to finance its lending operations across Bangladesh, mostly focusing on micro, small, and medium-sized enterprises (MSMEs). More than a third of the funds will support climate-related financing, enabling clients to set up renewable energy projects, such as solar and biogas, and energy efficiency projects, contributing to the reduction of the country’s carbon footprint.
A Recognised Sustainable Leader
MTB publishes an annual sustainability report since 2014. The 2023 edition of this document emphasised MTB’s decade-long adherence to the Global Reporting Initiative (GRI) standards, a sing of its commitment to transparency, accountability and ESG. The bank participates in several ESG initiatives, promoting climate action, supporting women’s health, and highlighting causes related to neurodiversity.
The Sustainable Finance Department of Bangladesh Bank, the country’s central bank, has recognised MTB as one of the top ten sustainable banks in Bangladesh on three occasion< in 2020, 2023 and 2024. The evaluation was based on five key criteria : Sustainable Finance, CSR Activities, Green Refinance, Core Banking Sustainability, and Banking Service Coverage. MTB argues that its consistent achievements across these areas reflect its strong focus on driving sustainable development through responsible banking.
“This structure reflects Swedfund’s commitment to fostering private sector development, climate action, and inclusive economic growth. Home to over 170 million people, a rising youth population, and a thriving MSME sector, investments like this one play an important role in poverty reduction and human development in Bangladesh,” says Jane Niedra, Investment Director for Financial Inclusion at Swedfund.
A Long-Standing Partner of Nordic DFIs
MTB has a longstanding background cooperating with DFIs, and Norwegian Norfund is currently the single biggest shareholder following its acquisition of 9.53% of total shares in 2019. Norfund first provided MTB with a loan facility worth US$20 million in May 2018. The other shareholders are from diversified business groups with exposure to trading, manufacturing and services covering various sectors in Bangladesh.
“Development Finance Institutions (DFIs) such as Swedfund play a vital role in addressing these challenges by investing in projects that improve lives, protect the environment, and build resilience. With this investment, we can support access to renewable energy and financial services for small and medium sized businesses, many of which are run by women, and thereby growth and more job opportunities,” says Marie Aglert, Chief of Investments at Swedfund.
“Our collaboration with Swedfund further strengthens MTB’s engagement with Development Finance Institutions, highlighting our dedication to inclusive finance and sustainable development. In the face of global economic challenges, we are confident that this partnership will yield mutual benefits and make a meaningful contribution to Bangladesh’s economy and climate resilience by directing funds to underserved MSMEs and climate-affected communities,” Syed Mahbubur Rahman, Managing Director & CEO of MTB, concludes.
