BRAC Bank gets $50m IFC loan to expand MSME financing

BRAC Bank PLC has secured a $50 million senior unsecured working capital solutions (WCS) facility from the International Finance Corporation (IFC) to expand access to finance for micro, small and medium enterprises (MSMEs) in Bangladesh, particularly women-led businesses and those operating in the agricultural sector.

This is the fourth consecutive financing facility extended by IFC to BRAC Bank, according to a press release.

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The facility will provide the bank with medium-term US dollar funding, strengthening its capacity to support businesses engaged in international trade, the import of capital machinery and raw materials, and other foreign currency-denominated activities.

Structured as a one-year facility with two annual renewal options, the financing has a maximum tenor of three years.

At least 50 percent of the proceeds, or an equivalent amount in local currency, will be allocated to women-owned MSMEs, while a minimum of 25 percent will support agricultural MSMEs. The financing is expected to help address critical funding gaps in sectors central to inclusive economic growth and job creation.

The investment is being made under the SME envelope of IFC’s MSME Finance Platform, which provides financing to financial institutions serving underserved businesses in emerging markets.

Tareq Refat Ullah Khan, managing director and CEO of BRAC Bank, said the investment reflected IFC’s confidence in the bank’s financial strength, governance standards and longstanding leadership in MSME banking.

He said the facility would strengthen the bank’s capacity to finance women-led enterprises and agricultural MSMEs while expanding access to foreign currency financing for businesses engaged in international trade and productive investment.

Wilfried Tamegnon, acting country manager for Bangladesh and Nepal at IFC, said expanding finance for women-led and agricultural enterprises would help firms invest, scale up and create quality employment across the country.