MICROCAPITAL BRIEF: Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO) Syndicates $70m in Loans to BRAC for Small, Medium-Sized Enterprises with Participation from OFID, OeEB, BIO, Actiam, responsAbility

Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), a Dutch public-private partnership that aims to promote growth in developing economies, recently disbursed a USD 70 million five-year syndicated loan to BRAC, an NGO that was formerly known as the Bangladesh Rehabilitation Assistance Committee and serves eleven countries as of 2015. The loan is meant to be used to support small and medium-sized enterprises in Bangladesh and is reportedly the largest syndicated loan ever to a bank in the country.

The participating lenders include the OPEC (Organization of the Petroleum Exporting Countries) Fund for International Development (OFID), a multilateral development finance institution based in Vienna, with USD 15 million; Oesterreichische Entwicklungsbank AG (OeEB), the development bank of Austria, with USD 10 million; Belgian Investment Company for Developing Countries (BIO), an investment company backed by the government of Belgium, with USD 10 million; Actiam, a Dutch investment fund, with USD 3.8 million; and responsAbility, a company based in Zurich that primarily invests in developing economies, with USD 2.5 million. FMO is providing USD 13.7 million of the syndication. As part of the loan, BRAC will adopt an “Environmental and Social Action Plan”, the details of which have not been released publicly.

According to a statement by Nanno Kleiterp, the CEO of FMO, “this debt facility provides BRAC Bank with the possibility to expand their 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.”

As of June 2014, FMO reports total assets of EUR 6.4 billion (USD 7.8 billion). As of December 2013, BRAC reported total assets of BDT 112 billion (USD 1.4 billion).

By Ananya Tiwari, Research Associate

About BRAC:
Established in 1972 as the Bangladesh Rehabilitation Assistance Committee, BRAC is a development organization based in Bangladesh. It operates in 11 countries as of 2015. According to its website, “BRAC works with people whose lives are dominated by extreme poverty, illiteracy, disease and handicaps. With multifaceted development interventions, BRAC strives to bring about change in the quality of life of poor people in Bangladesh.” BRAC’s initiatives include microfinance, advocacy campaigns, food security, community development, water and sanitation disaster relief, social enterprises, and human rights efforts. As of December 2013, BRAC reported total assets of BDT 112 billion (USD 1.4 billion). As of year-end 2012, BRAC reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 790 million, a gross loan portfolio of USD 754 million, 4.2 million borrowers and 5.84 million depositors with USD 313 million in total deposits. As of December 2013, BRAC reported total assets of BDT 112 billion (USD 1.4 billion).

About Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO): Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO) is a Dutch development bank that was founded in 1970. It supports financial institutions and governments through loans, guarantees and other investment promotion activities including local-currency investments. FMO is owned by the Dutch government, which holds a 51-percent stake, alongside commercial banks, trade unions, employers’ associations and individual investors. As of June 2014, FMO reports total assets of EUR 6.4 billion (USD 7.8 billion).
Sources and Additional Resources

[1] FMO Press Release, http://www.fmo.nl/k/n114/news/view/17027/179/fmo-spurs-economic-development-in-bangladesh.html

MicroCapital, November 4, 2014, Green for Growth Fund Southeast Europe, FMO, Fibabanka Invest in Energy-Efficient Businesses,https://www.microcapital.org/microcapital-brief-green-for-growth-fund-southeast-europe-fmo-fibabanka-invest-in-energy-efficient-businesses/

MicroCapital, July 8, 2013, BRAC, LOLC Micro Investments Buy 90% of Shares of Sri Lanka’s Nanda Investments and Finance, Plan its Downscaling to Microfinance, https://www.microcapital.org/microcapital-brief-brac-lolc-micro-investments-buy-90-of-shares-of-sri-lankas-nanda-investments-and-finance-plan-its-downscaling-to-microfinance/

MicroCapital, March 25, 2013, BRAC Applies Microcredit Strategies to Water, Sanitation, Hygiene (WASH) Programme in Bangladesh,https://www.microcapital.org/microcapital-brief-brac-applies-microcredit-strategies-to-water-sanitation-hygiene-wash-programme-in-bangladesh/

MicroCapital Universe Profile, BRAC: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=BRAC

MicroCapital Universe Profile, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO): https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Nederlandse+Financierings-Maatschappijvoor+Ontwikkelingslanden+N.V.+%28Netherlands+Development+Finance+Company%2C+FMO%29

MicroCapital Universe Profile, OFID: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=OPEC+Fund+for+International+Development

MicroCapital Universe Profile, ResponsAbility: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=responsAbility

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