Dutch development bank FMO has proposed a $50 million investment in Bangladeshi microfinance lender BRAC, according to a disclosure.
BRAC, which is one of the market leaders in the microfinance sector in Bangladesh, is sponsored by BRAC NGO that focuses on impact investments and financial inclusion.
BRAC now has a microfinance loan portfolio of $3.2 billion, serving more than 7.4 million customers of which 85 per cent are women. The lender has 3,200 branches in the country and caters to over 69,000 villages.
BRAC focuses on primary education, essential healthcare, and agricultural support, female empowerment, microfinance, and enterprise development, thereby creating opportunities for people at the bottom of pyramid to break the vicious circle of poverty in Bangladesh.
The proceeds will be fully earmarked for the financing of microloan portfolio of the company, according to FMO.
“The company’s social mission alignment has played a big role in creating a strong franchise and reputation worldwide and is closely aligned with FMO’s own development mandate,” the Dutch development bank said.
BRAC received a $30-million loan from CDC Group, the UK-based development finance institution in October last year.
Most recently, FMO proposed a $7.5 million investment in BRAC Myanmar Microfinance Company Limited, a Myanmar-based for-profit institution.
Last September, FMO proposed a senior unsecured loan worth $7.5 million to Bangladesh-based social enterprise Sajida Foundation. Sajida is the seventh-largest microfinance institution in the country with $199 million total assets and $34 million in equity (as of the third quarter of 2019).
Earlier, FMO had proposed a $4.8 million investment in Scatec Solar Bangladesh BV, a company incorporated in the Netherlands and owner of Bangla Sun Solar Energy Limited.