BRAC Launches Micro Fund in Africa

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Dec 2008
Dhaka, Bangladesh, December, 22 2008 - BRAC, a globally active Bangladeshi NGO, has debt capital amounting to $62.6 million for distribution of micro-credit among the poor in three African countries - Tanzania, Uganda and Southern Sudan.

The BRAC Africa Loan Fund will provide long-term loans in local currencies to more than 700,000 borrowers by expanding microfinance operations through over 200 branches in these countries, according to an announcement made in Dhaka on Sunday.

Aimed at catering to the local currency loan requirements of BRAC Uganda, BRAC Tanzania and BRAC Southern Sudan, the fund has set a target to reach a volume of $74.0 million through a second and final closing planned during the first half of 2009.

ShoreBank International Ltd, consulting arm of America’s ShoreBank Corporation, advised BRAC in raising capital and will also act as servicer of the fund. It has engaged Citibank NA to act as fiscal agent of the fund, which attracted investment from a diverse group of investors, said a BRAC news release.

‘The first closing of the fund amidst a global liquidity and credit crisis shows the strength of the appeal to investors of investments designed to deliver both financial returns and significant development impact,’ said Laurie J Spengler, president of ShoreBank International Ltd.

‘BRAC appreciates the support of our international investors as we work to build sustainable, locally managed development programmes. As the fund will allow us to reach hundreds of thousands of borrowers, it will help to combat poverty and improve the livelihoods of millions of people in East Africa,’ said BRAC founder and chairperson Fazle Hasan Abed.

He, however, made it clear that such operations would in no way affect BRAC’s ability to mobilise funds to scale up its Bangladesh programmes.

Lauding BRAC for its activities, Elizabeth Littlefield, chief executive officer of CGAP [Consultative Group to Assist the Poor], an independent policy and research centre, said the BRAC Africa Loan Fund would provide ‘very important access to long-term, local-currency capital in the region’.

BRAC initiated operations in Tanzania and Uganda in 2006 while Southern Sudan was added in 2007. In 2008 BRAC completed registration in Liberia and Sierra Leone.



 

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