Dutch development bank FMO invests $50m in Brac
The five-year facility will be fully earmarked to the financing of the microfinance portfolio of Brac
Dutch development bank FMO has invested $50 million in Brac to accelerate innovations that impact the lives of underserved and marginalised people.
The five-year facility will be fully earmarked to the financing of the microfinance portfolio of Brac, said Tushar Bhowmik, chief financial officer at Brac.
"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," he said.
"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.
This investment is in support of FMO's inclusive strategy in Bangladesh as more than 50% of the loan portfolio (less than 10,000 euros) of Brac is in microenterprise loan, according to a FMO disclosure.
"Brac'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," it said.
Currently, Brac is the market leader in 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.
Brac sources said they focus on primary education, essential health care and agricultural support, along with female empowerment, microfinance and enterprise development, thereby creating opportunities for people at the bottom of the pyramid in Bangladesh.
The Dutch development bank had earlier disclosed that it was considering a $7.5 million investment in Brac Myanmar Microfinance, a Myanmar-based for-profit institution.
In June last year, FMO proposed a $4.8 million investment in Scatec Solar Bangladesh, a company incorporated in the Netherlands and is the 100% owner of Bangla Sun Solar Energy.
Bangladesh, a country of 163 million people, has achieved steady economic development and is attracting increasing attention from foreign investors.
Its growth rate exceeded 8% in 2019, according to the World Bank data. It is also on track to move out of the United Nations' list of least developed countries in 2026.
Brac is the largest non-governmental organisation in the world, which was established in 1972 as a non-government development organisation by Sir Fazle Hasan Abed.
Through its plethora of development interventions that range from primary education, essential healthcare, agricultural support, female empowerment, microfinance, and enterprise development, it has acted as a catalyst, creating opportunities for people at the bottom of the pyramid to break the vicious cycle of poverty in Bangladesh.
