IPDC (Industrial Promotion and Development Company of Bangladesh) incorporated in Bangladesh in 1981 as a company to provide long-term financing to industries in the private sector. It was registered with the Registrar of Joint Stock Companies, Dhaka under the companies act 1913. It started functioning in 1983 with an authorised capital of Tk 1,000 million. On 31 December 2000, its paid up capital was Tk 450 million divided into 4.5 million shares of Tk 100 each. Its shares are held by the government of Bangladesh (30%), Commonwealth Development Corporation (17.5%), the Aga Khan Fund for Economic Development, Switzerland (17.5%), International Finance Corporation (17.5%), and DEG, a German Investment and Development Organisation (17.5%). IPDC obtained license from the bangladesh bank on 7 February 1995 to act as a non-bank financial institution under the Financial Institutions Act 1993.

Services provided by IPDC include long-term and short-term investment financing, lease financing, equity participation, and related consultancies to both local and foreign private investors in Bangladesh. It provides finance for constructing new industrial enterprises and for BMRE of existing industries. The company expanded its activities to project financing, issuance of guarantees, and corporate financing. In providing the finance, IPDC evaluates the profitability and cash flow of the applicants to judge their ability to bear operating expenses and meet all sorts of financial obligations. To receive credit support from IPDC, the equity requirement for a company is between 20% and 40% of the project costs. Repayment period of IPDC loans ranges between 5 and 10 years including a grace time of maximum 3 years.

During the period until 1999, IPDC approved loans of Tk 1,147 million for 39 projects and of the sanctioned amount, it disbursed Tk 896 million. Up to December 2000, the company lent Tk 3,147 million to 124 projects of large and medium scale industries. Net amount of financing by IPDC on 31 December 2000 stood at Tk 2,023.90 million, which comprised equity participation (Tk 446.75 million), long-term loans (Tk 1,102.77 million), and leased assets (Tk 474.38 million). The company also provided short-term finance (Tk 198.83 million) and advances for lease (Tk 33.46 million). On 31 December 2000, the total net asset value of the company was Tk 2,082.80 million, which comprised shareholders fund (Tk 603.21 million) and loan funds (Tk 1,479.59 million). The sources of loan funds included staff gratuity, lease deposits received, and lines of credit from banks and other local and foreign development and financial institutions. IPDC received funds from the CBSF Scheme of Financial Institution Development Project of the World Bank.

The performances of IPDC have been consistently good in terms of profitability, which increased every year throughout the entire period of its operations. Net profits of the company were Tk 93 million in 1997, Tk 93.85 million in 1998, Tk 95 million in 1999 and Tk 98.13 million in 2000. In 2000, the organisation had 28 employees. [S M Mahfuzur Rahman]