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Bangladesh SMEs get US$70mn boostWednesday, January 07, 2015 > 09:52:01
(Global Trade Review)
Bangladesh’s BRAC Bank Limited (BBL) has received a US$70mn loan for SME financing from a syndicate of investors.
Led by the Netherlands Development Finance Company (FMO) as mandated lead arranger, the five-year facility is divided between FMO (US$13.7mn), ACTIAM (US$3.8mn), the Opec fund for International Development (Ofid, US$15mn), the Development Bank of Austria (OeEB, US$10mn), the Belgian Investment Company for Developing Countries (BIO, US$10mn) and Swiss-based asset manager ResponsAbility (US$2.5mn), with an additional US$15mn to be provided by French development bank Proparco in 2015.
The deal, claimed to be “the largest international syndicated loan for any bank in Bangladesh”, is expected to benefit SMEs in rural parts of the country, thanks to BBL’s extensive branch network.
Syed Mahbubur Rahman, CEO of BRAC Bank, says: "This milestone deal is a testament to the belief of our international partners to BRAC Bank's commitment to reach out the SME entrepreneurs throughout Bangladesh, offering them financing solutions to support their business and elevate their economic condition.
“This first-of-its-kind deal will set a precedence to other Bangladeshi banks to avail similar extent of financing from international financiers and open up financing avenues for SME and corporate clients."
Nanno Kleiterp, CEO of FMO, adds: “This debt facility provides BRAC Bank with the possibility to expand its business. It will increase the availability of funding for Bangladeshi small and medium enterprises, thereby supporting the creation of jobs and economic development of Bangladesh.”
FMO also co-ordinated the Environmental and Social Action Plan as part of the loan agreement.