BRAC International Finance

Debt : November 2024

BIO has granted a USD 2.2 M loan to BRAC Uganda, an international microfinance organisation active in Uganda.

Amount

€ 2,102,771.26

Type of investment

Debt

Development impacts

Private sector consolidation/innovation
Financial inclusion
Gender

Beneficiary locations

Africa: Uganda

Investment field

Financial Institutions

Activity

KK.64.191 Microfinance institution

Organisation

BRAC International Finance

Website

https://www.bracinternational.org/

Domicile

Netherlands

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BRAC International Finance

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Debt € 1,388,622.05 (2024)

The financing of BRAC Uganda is part of USD 32M Series 2 financing of BRAC International, in which BIO participated alongside Proparco, Global Partnership, and Ceniarth. 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.

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 Decibels 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