The Bangladesh Rural Advancement Committee (BRAC) will receive 12.6 billion Bangladesh Taka (USD $180 million) in financing over six years, thanks to a microcredit securitization structured by RSA Capital, Citigroup, the Netherlands Development Finance Company (FMO), and KfW Entwicklungsbank (KfW). 1 billion Bangladesh Taka (USD $15 million) will be disbursed to BRAC every 6 months, with a maturity of 1 year.
During the transaction, a special purpose trust was created to purchase BRAC’s receivables from its microcredit portfolio and issue certificates to investors. FMO will purchase one-third of the certificates while Citibank, backed by a FMO guarantee and a KfW counter-guarantee, will purchase another one-third. The remaining one-third will go to Citibank, N.A. Bangladesh and two other Bangladeshi banks.
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