In order to speed up innovations impacting the lives of underserved and marginalised people, Dutch development bank FMO has invested $50 million in BRAC.
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.
At present, 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 per cent are women, in more than 69,000 villages.
Tushar Bhowmik, chief financial officer at BRAC stated the five-year facility will be fully utilized for the financing of the microfinance portfolio of 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.
In addition, Bangladesh, a country of 163 million people, has achieved steady economic development and is attracting increasing attention from foreign investors.
Its growth rate surpassed 8 per cent 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.
According to a FMO manifestation, this investment is in support of FMO’s inclusive strategy in Bangladesh as more than 50 per cent of the loan portfolio (less than 10,000 euros) of BRAC is in microenterprise loan.
“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.
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.
Prior to that, the Dutch development bank had revealed that it was considering a $7.5 million investment in BRAC Myanmar Microfinance, a Myanmar-based for-profit institution.
FMO proposed in June last year a $4.8 million investment in Scatec Solar Bangladesh, a company incorporated in the Netherlands and is the 100 per cent owner of Bangla Sun Solar Energy.