Skip to main content
Last modified on Wednesday, 27 October 2021 13:01

BRAC-Dutch development bank financing partnership of USD 50m: A milestone in microfinance to improve life of the underserved Featured

Rate this item
(0 votes)

BRAC, the world’s number one non-governmental organisation, and FMO, an entrepreneurial development bank from the Netherlands, have set a milestone by entering a financing partnership worth USD 50 million, as it is the first ever direct lending to any microfinance institution of Bangladesh by any international financing institution.

BRAC obtained the fund as a 5-year long credit facility in April in current year to support its microfinance programme, speakers said today on Wednesday (27 October) at a ceremony, delayed to arrange due to the pandemic, organised at BRAC Centre in Mohakhali in Dhaka.

The entire fund is earmarked for financing of the microfinance portfolio of BRAC. The financing has been made in full compliance of the existing laws of Bangladesh.

The ceremony was physically attended by Mr Anne van Leeuwen, ambassador, and Mr Bas Blaauw, first secretary of the Kingdom of the Netherlands to Bangladesh. Mr Asif Saleh, executive director, BRAC, led the representation from BRAC at the event. Mr Tushar Bhowmik, CFO, Ms Moutushi Kabir, director, communications, Mr Sahed Shams Azad, chief operating officer, Microfinance Programme were also present from BRAC at the ceremony. K Mahmood Sattar, chairman, RSA Capital, was also present at the function. The FMO team was virtually present at the event.



Anne van Leeuwen, ambassador of Kingdom of the Netherlands to Bangladesh said, “Bangladesh has been a real champion in 50 years of independence, and BRAC has been the partner in this journey by combating poverty, doing great in the education and health sector. Bangladesh has the longest experience in Microfinance. I feel, by strengthening the Microfinance in this way, we can impact millions of peoples’ lives out of poverty.”

Asif Saleh, executive director, BRAC said, “The Netherland government has been a great partner in many of our education and Water,Sanitation and Hygiene programmes. BRAC Microfinance programme has been playing a big role during the time of pandemic and recovery of the economy from this pandemic. We are glad that FMO came to us during this challenging time and I am appreciative of this financial partnership and partnership of trust.”

“We are delighted to receive this investment from FMO. It is a milestone achievement for the microfinance sector as a foreign bank is directly investing in a microfinance institution in Bangladesh for the first time,” said Tushar Bhowmik, BRAC’s CFO.

“The investment will help improve the livelihoods of people who need access to affordable financial solutions, especially in marginalised communities, in a more efficient way,” he added.

“We are thrilled to re-establish our partnership with BRAC in Bangladesh by supporting their microfinance activities. The organisation’s mission and vision closely resonate with FMO’s own agenda of achieving financial inclusion. The USD 50 million loan facility will bring funding stability to the balance sheet of BRAC during a time of increasing uncertainty brought by the pandemic, and we believe it can act as a signal for more investments to take place in the microfinance sector,” said Mr Huib-Jan de Ruijter, chief investment officer of FMO.

This investment aligns with the FMO’s inclusive strategy in Bangladesh as more than 50% of the loan portfolio of BRAC supports micro-enterprise loans (< 10,000 EUR), mentions an FMO statement.

The investment will help improve the livelihoods of the people who need access to affordable financial solutions, especially in the underserved and marginalised communities, said the speakers. It will also help accelerate the drive for innovations of affordable solutions to facilitate financial inclusion of women and other underserved and marginalised sections of people, they added.

Speakers from BRAC expressed hope that the successful closure of this deal paved the way for such partnerships in future, expecting further strengthening the partnership with FMO.

Currently, BRAC is the market leader for the microfinance sector in Bangladesh with a microfinance loan portfolio of $3.2 billion serving more than 7.4 million customers, among whom 85% are women, in more than 69,000 villages.

 

Read 561 times

Join the world’s biggest family

sign-up

Subscribe

STAY INFORMED. Subscribe to our newsletter.

Top