Tip: Activate javascript to be able to use all functions of our website

Press Release from 2023-01-05 / DEG

DEG promotes lending to small businesses in Bangladesh

Loan of USD 50 million for BRAC Bank Ltd

Developing countries such as Bangladesh are particularly affected by the impact of global crises. For example, the rise in consumer prices has steadily increased the cost of living for the country's population since the early part of 2022. This makes it all the more important to strengthen local small and medium-sized enterprises (SMEs) given their importance as one of the largest employment generation sectors. DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, is therefore providing a long-term loan totalling USD 50 million to BRAC Bank Ltd. in Bangladesh. BRAC Bank will use these funds to provide foreign currency loans along with proportionate support to local small and medium-sized enterprises. At least half is earmarked for businesses run by women.

Founded in 2001, BRAC Bank has been the pioneer of providing SMEs with small-volume loans, giving them access to banking services in Bangladesh. The bank fills a gap in this way, because small and medium-sized enterprises, which are important for growth and employment in the country, need access to capital. BRAC Bank thereby contributes to market development in Bangladesh by providing real-economy financing and generating local income, for example through the payment of salaries and interests.

Business Support Services for Gender Action Plan

An important aspect of DEG's support for BRAC Bank is the advancement of women. As part of a "Gender Action Plan", financing offers for female entrepreneurs are to be improved and the share of women in BRAC Bank’s workforce and at all management levels is to be increased. DEG will assist BRAC Bank through its Business Support Services.

Over 50 per cent earmarked for women

"With our financing, we are supporting the growth of a successful financial institution, so that it can reach the important target group of small and medium-sized enterprises even better. Our support for BRAC Bank in areas such as gender finance is a good example of how we are focusing even more specifically on further increasing our customers’ positive developmental impact. At the same time, we are promoting greater participation of women in Bangladesh’s economic life," says Monika Beck, member of DEG's Management Board.

Selim RF Hussain, Managing Director and CEO of BRAC Bank said: "The vision of the bank's board, especially its founding chairman Sir Fazle Hasan Abed, who envisioned reaching the unbanked "missing middle" through this inclusive banking strategy, is the key to BRAC Bank's success in SME banking. Institutionalizing SME banking and making it financially viable required strong governance and a customer-centric business model. Our organization's dynamic culture and its dedicated staff are what drive the company to its pinnacle. However, because this is our mandate, we are unwavering in our commitment to sustain the expansion of SME lending."

BRAC Bank is part of the global non-governmental organization BRAC, which was founded in Bangladesh in 1972 and now operates in 10 countries in Asia and Africa. With 187 branches, 456 SME unit offices, 1,000 agent banking outlets and 8,369 employees throughout the country, the bank caters to around 1.3 million customers, many of whom are women living in rural areas.

Contact

DEG Press Office

Anja Strautz

+49 221 4986 1843