In an exciting announcement, the international arm of one of the world’s largest development organisations, BRAC, has launched a debt program that will secure financing for its microfinance operations over the coming decade. The program is launching with two initial investors, Global Partnerships and Proparco.
According to Alistair Mackie, Palladium Head of Capital Advisory, EMEA, this is just the beginning. “We launched with two investors, but we have put the structure in place to grow with additional investors over the next decade to match BRAC’s ambition for impact at scale.”
Palladium, which has long partnered with and consulted for BRAC International, worked as the sole financial advisor on the development and structuring of the debt program, as well as facilitated the investment of the two initial investors for the launch.
BRAC, which was founded in 1972 in Bangladesh, is a pioneer of microfinance and now has microfinance operations in six countries internationally: Myanmar, Tanzania, Uganda, Rwanda, Sierra Leone, and Liberia. Together, these entities serve nearly 700,000 clients, 96 percent of whom are women.
With a focus on women living in poverty in rural and hard-to-reach areas, BRAC’s microfinance program supports women to create self-employment opportunities, build financial resilience, and harness women’s entrepreneurial spirit by economically empowering them.
As Mackie adds, “It’s particularly important right now to support low income communities as they rebuild their livelihoods following the pandemic, helping them to sustain and strengthen financial resilience.”
Building Back Better with Microfinance
Establishing a dedicated international financing company for BRAC International Microfinance through the debt program represents a significant step in BRAC’s evolution. With this launch, BRAC International Microfinance will be positioned to tap the capital markets periodically over the coming decade for additional investments.
The first debt issuance is linked to BRAC International Microfinance's COVID-19 rebuilding efforts, making liquidity available to households living in poverty across the six countries in which BRAC International Microfinance currently operates. Subsequent issuances will propel BRAC International Microfinance’s growth in existing and new countries to make financial products and services available to its borrowers and savers that will strengthen their livelihood, well-being, and resilience.
Ensuring that women are included in global economies has been at the centre of many recovery plans and strategies. Providing microfinance and loans to women in rural areas of developing countries, where they might not have access to traditional credit or financing is a critical pillar of women’s economic empowerment and economy recovery.
“We are now in a stronger position to secure continuous funding to provide far greater value to the hundreds of thousands of clients that we already serve and to achieve greater impact at scale by serving hundreds of thousands more who are outside of the formal financial system,” concludes Shameran Abed, the Executive Director of BRAC International and Managing Director of BRAC International Holdings B.V.
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