CDC Group, the UK government’s development finance institution, yesterday announced to invest $30 million in Brac Bank of Bangladesh.
BRAC Bank, which has the largest market capitalization in Bangladesh, is sponsored by BRAC, World’s largest NGO, that focuses on impact investments and financial inclusion. BRAC Bank has 1.2 million customers in over 187 branches, serving customers across the SME, corporate and retail segments in the banking industry.
Bangladesh presents significant opportunities for entities like CDC Group, in financial services, infrastructure and manufacturing, said its chief executive, Nick O’Donohoe.
Bangladesh has received just $150 million which is less than one percent of the CDC’s investment portfolio of $6 billion and the CDC expects it to significantly grow as the institution aims to double its investments over the next three to four years.
The CDC’s capital would help Brac Bank increase its lending programme to export-led and other businesses to accelerate their growth, advance employment and positively contribute to Bangladesh’s economy.
CDC aims to reach those entities to create jobs and help organise private equity and venture capital funds which can provide small amounts of investments to those growing companies.
CDC sees huge opportunities for Bangladesh in terms of growth and skills, especially considering that foreign direct investment being below 1 percent of the GDP.
Graham Wrigley, chairman of CDC Group, said the country has a more developed debt market than it has of equity and the CDC thinks that in the next five to 10 years a lot of the Bangladeshi companies will want to raise equity through the capital market.
CDC has been investing Bangladesh since the early eighties and over the last 10 years and committed excess of $205 million to the country.
CDC made its first investment in Bangladesh in 1980 with $1 million for IPDC and supported funds for Runner and Butterfly.
The CDC statement mentions of its previous investments in Bangladesh such as $15 million for RFL Electronics in 2017, $103 million for a 414 megawatt energy project in Sirajganj in 2016, $25 million for Grameephone in 2013 and $20 million for Frontier Bangladesh II in 2015.
CDC also opened a branch in Dhaka and appointed Rehan Rashid as the country director of the institution for Bangladesh. Rehan was most recently at the IFC and held several positions at global financial institutions including ICICI Bank Limited, Dubai Islamic Bank and HSBC.