The Hongkong and Shanghai Banking Corporation Limited (HSBC) has completed its first receivables finance transaction for the M&J Group, one of the leading readymade garment exporters in Bangladesh.
This proposition was rolled out in line with the HSBC's own receivables finance model, wherein the customer gets early payment against their deferred term exports from the HSBC Bangladesh.
"Such payment will be under the buyer's default risk coverage from the HSBC offices abroad or other foreign reputable financial institutions," the bank said in a statement on Tuesday.
The HSBC said a circular recently issued by the central bank has paved the way to offer such secured and efficient way of working capital financing in the country.
Ajay Sharma, regional head of global trade and receivables finance of Asia Pacific, HSBC, said global trade is undergoing an unprecedented level of disruption.
He said, "As maintaining liquidity and mitigating risk have become the primary objectives of corporates, there has been an increased focus on working-capital optimisation. Receivables finance as a solution can help businesses unlock liquidity and better manage risks."
Md Mahbubur Rahman, chief executive officer of HSBC Bangladesh, said, "As the leading trade bank in Bangladesh, the HSBC is proud to be associated with this first-of-its-kind transaction, which will support Bangladeshi exporters to receive payments on a non-recourse basis and facilitate better working capital management."
Salahuddin Ahmed, managing director of M&J Group, said the move would help him to get benefit at both ends by catering to buyers increased credit terms but with early payment on non-recourse basis.
The HSBC is operating in Bangladesh since 1996 with key focus in trade finance. The bank is currently facilitating almost 10 percent of the country's total trade volume.