CDC Group plc (“CDC”), the UK’s development finance institution, has today announced a US $30 million debt commitment to BRAC Bank, which has largest market capitalization in the Bangladesh banking sector. BRAC Bank is sponsored by BRAC NGO, the largest NGO in the world, with a clear mandate for impact investment and financial inclusion.
CDC’s capital will help BRAC Bank to increase its lending programme to export-led and other businesses to accelerate their growth, advance employment and positively contribute to Bangladesh’s economy. Banking penetration and access to long term finance in Bangladesh remains low; this has restricted the growth of small and medium enterprises (SMEs) and subsequently stifled economic growth. CDC invests long term capital in financial institutions as a powerful mechanism through which to deliver impact at scale as its fund injection helps banks to increase their lending capabilities.
With 1.2 million customers and over 187 branches, 456 SME Officesand 460 ATMs across Bangladesh, BRAC Bank services customers across the SME, Corporate and Retail segments in the banking industry. In addition, BRAC promotes financial inclusion by developing its retail personal finance programme to help people buy homes, educate their children and access bank accounts.
BRAC Bank has also committed to women’s economic empowerment through its comprehensive women-centred product offering; the TARA proposition helps to bring women into the mainstream financial system, strengthening their role in local society. As part of this, gender equality has been integrated into the Bank’s workforce.
Srini Nagarajan, Managing Director and Head of Asia said:
“Committing our capital to BRAC Bank promotes financial inclusion, increases lending to SMEs and promotes women economic empowerment. All three areas are key impact strategies within CDC’s approach to investing to support economic prosperity. As a development finance institution, our ability to lend long term capital will play a transformational role in Bangladesh’s banking system and in local communities as access to finance increases.
BRAC Bank is a leading local bank, managed by a strong management team; we look forward to working with them to help accelerate their capabilities in Bangladesh.”
CDC has been responsibly investing Bangladesh since the early eighties and over the last 10 years, we have committed excess of $205 million to Bangladesh. It has been invested in the wider region of South Asia for over 30 years and has over 300 investee partners, valued at nearly US$2 billion. As part of its commitment to invest a further $1.7 billion in South Asia from 2018-2021, CDC offers flexible investment solutions including equity, corporate debt, project finance and fund investments.
BRAC Bank Managing Director & CEO Selim R. F. Hussain commented:
“CDC’s commitment will help BRAC Bank expand credit facilities to export-oriented Bangladeshi businesses allowing them to explore further international markets. As Bangladesh graduates to a middle-income country, from a least developed country (LDC), it’s businesses must explore international market to boost GDP. With strong governance, client acquisition strategies and risk management processes in place, BRAC Bank is well placed to utilize CDC’s debt facility to achieve exponential growth in coming years. We are proud to partner with renowned UK development finance institution to create opportunities for businesses in promising emerging markets, like Bangladesh.”