MICROCAPITAL BRIEF: BRAC Raising Debt from Global Partnerships, Proparco; Seeking to Expand Microfinance Outreach, Including into 3 New Countries

To grow its microfinance operations, BRAC International, which operates in a range of African and Asian countries, recently launched a programme to source debt from multiple investors, the first of which are Global Partnerships, an investment fund manager based in the US city of Washington, and Proparco, a development finance institution backed by the French government. With the new funding, BRAC International aims to grow its client base, which is made up almost entirely of women, and “expand into three new countries over the next five years.” The target size of the debt program and the names of the countries slated for expansion have yet to be publicly released.

Shameran Abed, Executive Director of BRAC International, said, “Launching a capital markets debt programme represents a step-change in how BRAC International will finance the delivery of its microfinance products and services across all of its operations in Asia and Africa. We are now in a stronger position to secure continuous funding to provide far greater value to the hundreds of thousands of clients that we already serve and to achieve greater impact at scale by serving hundreds of thousands more who are outside of the formal financial system.”

In addition to microfinance, the BRAC family of entities provides educational, agricultural, health, “ultra-poor graduation” and other programming. The organizations, the first of which was established in 1972, operate in 14 countries and serve 700,000 people. The entities include the Bangladeshi NGO BRAC International; multiple single-country organizations; and the Netherlands-based NGO Stichting BRAC International, which owns the social business BRAC International Holdings. As of December 2020, BRAC International Holdings reports total assets of USD 218 million as well as 12-month return on performing assets of -2 percent and return on equity of -4 percent. The name “BRAC” derives from the acronym for Building Resources Across Communities.

Global Partnerships aims to expand opportunities for people living in poverty through investments in social enterprises. As of December 2021, the organization had active investments in 31 countries. Global Partnerships was founded in 1994 and launched its first fund in 2005. It reports having invested USD 574 million, impacting 27 million lives since its inception through March 2022.

Proparco, founded in 1977 as Société de Promotion et de Participation pour la Coopération Economique, is the private-sector financing subsidiary of the French government’s Agence Française de Développement. The organization funds financial institutions and other businesses in Africa, Asia and Latin America to promote sectors such as agribusiness, education and renewable energy. It reports total assets of EUR 6.4 billion (USD 6.8 billion) as of December 2020.

By Sheen Gupta, Research Associate

Sources and Additional Resources

BRAC International press release
https://bracinternational.org/pressroom/debt-programme/

BRAC International Holdings 2020 annual report
http://www.brac.net/downloads/ar2020/BRAC-International-Holdings-BV-Financial-Report-2020.pdf

Global Partnerships homepage
https://globalpartnerships.org/

Proparco homepage
https://www.proparco.fr/

Proparco 2020 annual report
https://www.proparco.fr/en/ressources/financial-report-2020

Previous MicroCapital article on Proparco
https://www.microcapital.org/microcapital-brief-hatton-national-bank-borrows-60m-from-proparco-for-smes-in-sri-lanka/

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