Mon, 06 February 2023
The Daily Ittefaq

BRAC Bank to borrow $50m from Germany’s DEG

Update : 20 Jan 2023, 19:52

BRAC Bank Limited signed an agreement with Deutsche Investitions- und Entwicklungsgesellschaft (DEG) to take a long-term loan totalling $50 million.

DEG is a German development finance institution supporting private enterprises in developing and emerging-market countries.

BRAC Bank will use the fund to provide loans to local micro, small and medium-sized enterprises. At least half of the fund is earmarked for businesses run by women.

Founded in 2001, BRAC Bank has been the pioneer in providing SMEs with small-ticket loans without any collateral and giving them access to banking services especially in rural and semi-urban Bangladesh. The bank fills a gap because small and medium-sized enterprises, which are important for growth and employment in the country, need access to capital. BRAC Bank thereby contributes to market development in Bangladesh by real-economy financing and generating local income.

An important aspect of DEG's support for BRAC Bank is the advancement of women. As part of a "Gender Action Plan", financing offers for female entrepreneurs is to be improved, and the share of women in BRAC Bank's workforce and at all management levels is to be increased. DEG will assist BRAC Bank through its Business Support Services.

"The vision of the bank's board, especially its founding chairman Sir Fazle Hasan Abed, who envisioned bringing the unbanked "missing middle" forward through this inclusive banking strategy, is the key to BRAC Bank's success in SME banking. Institutionalizing SME banking and making it financially viable required strong governance and a customer-centric business model," said Selim R. F. Hussain, managing director and CEO of BRAC Bank.

"With our financing, we are supporting the growth of a successful financial institution so that it can reach the important target group of small and medium-sized enterprises even better. Our support for BRAC Bank in areas such as gender finance is a good example of how we are focusing even more specifically on further increasing our customers' positive developmental impact. At the same time, we are promoting greater participation of women in Bangladesh's economic life," says Monika Beck, member ofDEG's management board.

 

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