BII commits $50 mn to BRAC Bank to support MSMEs in Bangladesh

There are around 10 million MSMEs in Bangladesh, employing roughly 80 per cent of the population and responsible for half of the country’s industrial output.

The Central Bank of Bangladesh recognises the segment as indispensable for overall economic development in the country and specifically women entrepreneurs as crucial for attaining sustainable economic growth and poverty reduction. However, access to finance has been a major challenge, with only 20 per cent of total loans in the country going to SMEs, including female-owned enterprises, according to BRAC Bank’s data, BII said in a press release.

Half of BII’s loan will be directed to MSMEs and the other half will target women entrepreneurs qualified under the 2X criteria, with an expectation to reach up to 3,500 MSMEs and women entrepreneurs in total and accelerate their business growth.

BRAC Bank has served 1.5 million MSMEs since its establishment in 2001 and expects to grow its loan book. It is sponsored by BRAC NGO, a leading non-government organisation with a mandate for impact investment and financial inclusion.

“I am delighted that the British International Investment is backing BRAC Bank to fund micro-, small- and medium enterprises and women-led businesses. This will enable small businesses and female entrepreneurs in Bangladesh to take up more economic opportunities and create more jobs. This investment reinforces the UK’s commitment to support inclusive and sustainable development in Bangladesh and is a great demonstration of the UK’s modern economic partnership with Bangladesh,” Sarah Cooke, British high commissioner to Bangladesh, said.

“We are proud to work with BRAC Bank again with a bigger mandate to support small businesses and women entrepreneurs in Bangladesh. Since we made our first investment in BRAC Bank in 2019, we have been looking to increase lending for inclusion in Bangladesh and with trusted partners like BRAC Bank, we can reach more people that need our support the most and are truly instrumental in driving the country’s progress and prosperity,” Mohammad Rehan Rashid, country director, Bangladesh at BII, said.

“As an MSME focused bank, ensuring easy access to credit to grassroots entrepreneurs and women business owners is a priority for BRAC Bank. BII’s commitment will help BRAC Bank expand credit facilities to MSMEs and women-led businesses enabling them to solidify businesses. The loan will help micro-entrepreneurs expand product basket, penetrate new marketplace and create jobs invigorating rural economy. Our strong partnership with the UK’s development finance institution aims to create opportunities for the unserved and underserved businesses. The injection of $50 million from BII will also ameliorate foreign exchange position of Bangladesh,” Selim R F Hussain, managing director & CEO, BRAC Bank, said.

This investment supports UN SDG 5 on Gender Equality, SDG 8 on Decent Work and Economic Growth, as well as SDG9 on Industry, Innovation and Infrastructure.

Fibre2Fashion News Desk (RR)