This is the first lending venture by an international bank for any microfinance institution in Bangladesh
Brac, the world’s number one non-governmental organization, and FMO, an entrepreneurial development bank from the Netherlands, have set a milestone by entering a financing partnership worth $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 five-year-long credit facility in April in the current year to support its microfinance program, speakers said at a ceremony, organised at Brac Centre in Mohakhali in Dhaka on October 27.
According to a press release, the entire fund is earmarked for the 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 Anne van Leeuwen, ambassador, and Bas Blaauw, first secretary of the Kingdom of the Netherlands to Bangladesh.
Asif Saleh, executive director of Brac, led the representation from Brac at the event.
Tushar Bhowmik, CFO; Moutushi Kabir, director, communications; Sahed Shams Azad, chief operating officer, Microfinance Program 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.
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.
“The investment will help improve the livelihoods of people who need access to affordable financial solutions, especially in marginalized 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 organization’s mission and vision closely resonate with FMO’s own agenda of achieving financial inclusion. The $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 Huib-Jan de Ruijter, chief investment officer of FMO.
The investment will help improve the livelihoods of the people who need access to affordable financial solutions, especially in the underserved and marginalized communities, said the speakers.
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.