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Brac Bank

 

BRAC Bank Ltd. is considered the market leader within Small and Medium sized Enterprise (SME) financing in Bangladesh. A main strategic focus of the bank is to supply bank products and services to areas of the country where smaller companies today have no access to finance. 60 million enterprises are believed not to have access to finance in Bangladesh. To be able to attract affordable and stable funding the bank has become a fully fledged commercial bank. In addition to lending, the bank offers savings and investment banking products to affluent individuals and trade finance products to larger companies. However, management is committed to keep more than 60 per cent of the portfolio in SMEs. For the SMEs in the portfolio, the average loan size is around BDT (Bangladesh Thaka) 650.000 (NOK 53 000), and the maximum tenor is 21 months.

In October 2010 Norfund invested BDT 490 million (about NOK 43 million ) in BRAC Bank, as part of a 3 billion BDT subordinated listed convertible bond issue. In the Western economies bond issues are an important way of raising funds for banks and larger companies. This was the first time international investors participated in a bond issue in Bangladesh. Norfund believes the participation in and support of listed bond issues is a valuable and important contribution to the deepening of the financial markets in developing countries.

Facts

  • Sector: Financial services
  • Investment year: 2010
  • Instrument: Mezzanine
  • Committed amount (MNOK): 45,8