BRAC International Finance

Debt : November 2024

BIO has granted a USD 13.6 M loan to BRAC International Finance, an international microfinance organisation.

Amount

€ 12,815,000.00

Type of investment

Debt

Development impacts

Private sector consolidation/innovation
Financial inclusion
Gender

Beneficiary locations

Africa: Liberia, Sierra Leone, Tanzania, Uganda

Investment field

Financial Institutions

Activity

KK.64.191 Microfinance institution

Organisation

BRAC International Finance

Website

https://www.bracinternational.org/

Domicile

Netherlands

BIO has granted a loan of USD 13.6 M to BRAC International as part of a USD 32.3 M debt financing round together with Proparco, Ceniarth and Global Partnership. USD 20 M of this will be used to support the growth of the microfinance activity in Tanzania, with the remainder of the investment going to other Sub-Saharan African entities in Liberia, Uganda and, Sierra Leone.

BRAC was founded in Bangladesh in 1972 and is one of the largest, most innovative and impactful development organisations of the world. BRAC has been one of the pioneers of microfinance since it first started, and now operates in six countries outside of Bangladesh - Myanmar, Tanzania, Uganda, Rwanda, Sierra Leone and Liberia. Together, these entities, operated by BRAC International Holdings B.V., serve nearly 700,000 clients, 96% of whom are women.

BRAC International Microfinance’s mission is to provide a range of financial services responsibly to people at the bottom of the pyramid. It particularly focuses on women living in poverty in rural and hard-to-reach areas, to create self-employment opportunities, build financial resilience, and harness women’s entrepreneurial spirit by empowering them economically.

The BRAC microfinance institutions are targeting women and entrepreneurs with simplified & standardised products, granting loans of, on average, $200.

The partnership with BIO and Proparco is a powerful endorsement of our work and a transformative milestone for BRAC’s initiatives in Tanzania and its sister companies across Africa

BRAC Tanzania CEO Marie-Marcelle Gerard

BRAC Tanzania Finance Limited, operating since 2006, has become the largest microfinance institution in Tanzania by client base and regional coverage. With a network of 177 branches, it serves over 360,000 clients across 27 of Tanzania’s 31 administrative regions, focusing on providing financial products to marginalized communities and supporting their economic resilience.

Development impacts

Private sector consolidation/innovation
BIO's investment supports BRAC's client-centred lending approach, fostering new products like agri-finance and practices like bi-weekly loan repayments.

Additionally, the investment backs BRAC's digitization strategy to enhance operational efficiency and develop digital channels for client convenience.
Financial inclusion
BIO's loan supports the growth of BRAC's microfinance portfolio, focusing on women entrepreneurs (96% of clients) in rural areas. It enables access to deposit products for clients in Uganda and expands financial services in underserved regions by opening new branches by 2028.

BRAC primarily serves micro-enterprises owned by rural, underserved women.
Gender
Gender equality is a primary goal for this investment. BRAC assessed entities have solid gender risk management systems in place, career progression/leadership initiatives, and an explicit commitment to advance women equality. They meet almost all 2X criteria and are willing to sign a gender MOU with BIO & Proparco.

E&S Impact

BIO and BIHBV agreed on one mandatory and one voluntary action to strengthen the E&S practice of the group. The first requires a more systematic insertion of the exclusion list in the lending manual, and the second pushes BIHBV to finalise the already planned Client Protection certification of some subsidiaries.

Situation at the time of investment

All BRAC subsidiaries are committed to the CP Pathway and underwent self-assessment using the SPI5. Also, the group did a 60 Decibel survey to assess the impact of its operations on end-clients. A person is appointed in each subsidiary to follow the E&S topics closely. Support and guidance is provided by the Group.

Risk Category: C