BRAC International taps capital markets to launch debt programme supported by Global Partnerships, Proparco
BRAC International, the international arm of one of the world’s largest development organisations, BRAC, has launched a debt programme that will secure financing for its microfinance operations for the coming decade, said a press release.
Two investors, Global Partnerships and Proparco - have led the launch of the programme and worked closely with BI Microfinance to achieve a successful first issuance.
The aim of BRAC International (BI) Microfinance and their investors is to provide far wider financial access and support to its clients, primarily women living in poverty and hard-to-reach areas, across Africa and Asia.
The timing of the programme is particularly important to support low-income communities as they rebuild their livelihoods recovering from a global pandemic.
“Launching a capital markets debt programme represents a step-change in how BRAC International will finance the delivery of its microfinance products and services across all of its operations in Asia and Africa'' said Shameran Abed, executive director of BRAC International. “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.”
Mark Coffey, president and chief investment officer, Global Partnerships, said, “BRAC International Microfinance has a demonstrated track record of empowering women and enhancing the economic resilience of households living in poverty.”
“Global Partnerships is proud to expand its relationship with the organisation by providing impact-first capital from its affiliated funds to help the organisation deepen its inclusion and scale its impact,” he added.
"Proparco is proud to collaborate for the first time with BRAC, a leading player in microfinance. We are glad to participate in the launch of the capital markets programme with BRAC International and its six entities located in priority countries for Proparco. Supporting the financial inclusion of populations that are usually excluded from formal financial services is a mission that BRAC achieves with exemplarity. We hope this first deal will pave the way for other operations between our two entities," said Thomas Eloy, head of debt department at Proparco.
Founded in Bangladesh in 1972, BRAC has been one of the pioneers of microfinance. Having started its microfinance programme in Bangladesh in 1974, BRAC first expanded its microfinance operations internationally in 2002 and now operates in six countries outside Bangladesh - Myanmar, Tanzania, Uganda, Rwanda, Sierra Leone and Liberia, and serves nearly 700,000 clients, 96 per cent of whom are women.
BRAC International Microfinance’s mission is to provide a range of financial services responsibly to the people living in poverty, particularly women, in rural and hard-to-reach areas, to create self-employment opportunities, build financial resilience, and harness women’s entrepreneurial spirit.
BRAC is a strong advocate of client-centric microfinance. Its first Impact Report published last year gives an overview of the results from its impact surveys since 2019 and presents its approach to measurement and management of client-level outcomes and impact. In its 2021 impact survey, 92 per cent of their clients said that their quality of life had improved and 90 per cent of clients said they earned more after engaging with BRAC.
The transformative international debt programme will enable BI Microfinance to tap capital markets for securing reliable and consistent funding and to grow significantly in existing countries and expand into three new countries over the next five years. By 2026, it expects to grow its client base by more than one million, the majority of whom will be women.
The first debt issuance under this new programme is linked to BI Microfinance's Covid-19 rebuilding efforts, making liquidity available to households living in poverty. Subsequent issuances will propel BI Microfinance’s growth in existing and new countries to make financial products and services available to its borrowers and savers to strengthen their livelihood, well-being, and resilience.
Global Partnerships (GP) is an impact-first investment fund manager dedicated to expanding opportunities for people living in poverty. GP’s affiliated funds deploy capital to social enterprises that deliver market-based products and services that empower people to earn a living and improve their lives.
Proparco is the private sector financing arm of Agence Française de Développement Group (AFD Group). It has been promoting sustainable economic, social, and environmental development for over 40 years. Proparco finances companies, whose activity contributes to creating jobs and decent incomes, providing essential goods and services, and combating climate change.
Palladium Impact Capital, acted as the sole financial advisor to BRAC International Microfinance and Courageous Capital Advisors, LLC, served as specialist advisor to BRAC International Microfinance for this programme.