BRAC Bank has secured a US$50 million financing facility from an international financial institution to expand funding for micro, small and medium-sized enterprises in Bangladesh, with a particular focus on women-owned businesses and agriculture-related enterprises.
The financing will be channelled through the bank’s offshore banking unit and structured as unsecured working capital support. The facility will initially run for one year, with the option of two further annual renewals. If fully renewed, the total financing period could therefore extend to three years.
A key feature of the agreement is the allocation requirement for women-owned small and medium-sized enterprises. At least 50 per cent of the facility, or the equivalent amount in local currency, will be directed towards businesses owned by women. Another 25 per cent or more is earmarked for agriculture-related small and medium-sized enterprises.
The targeted allocation is significant because access to formal finance remains an important challenge for many smaller businesses. Entrepreneurs often need working capital to purchase raw materials, maintain inventories, pay suppliers and meet other day-to-day business expenses. Businesses that lack sufficient collateral can face additional difficulties when seeking conventional bank financing.
The new facility is also expected to strengthen BRAC Bank’s capacity to provide financing in foreign currencies. This could be particularly useful for businesses involved in international trade, including those requiring imported raw materials, capital machinery and other inputs. Access to foreign-currency financing can help such enterprises manage the funding requirements associated with cross-border commercial activities.
BRAC Bank Managing Director and Chief Executive Officer Tareq Refat Ullah Khan said the investment reflects the international financial institution’s confidence in the bank’s financial strength, governance and experience in financing small and medium-sized businesses.
According to him, the new facility will widen access to finance for enterprises that play an important role in Bangladesh’s economy. Women entrepreneurs, agriculture-focused businesses and companies engaged in international trade and manufacturing are expected to benefit from the expanded availability of foreign-currency financing.
The latest facility marks the fourth consecutive financing arrangement provided to BRAC Bank by the same international financial institution. The latest agreement builds on the two institutions’ long-standing partnership and is intended to support financial inclusion and private-sector development in Bangladesh.
The financing comes under the institution’s dedicated small and medium-sized enterprise funding facility, which operates through financial institutions to extend capital to businesses in developing economies that may have comparatively limited access to conventional sources of finance.
Small and medium-sized enterprises occupy an important position in Bangladesh’s economic structure. They contribute to employment generation, local production and the wider supply chain, while many smaller firms also serve as links between producers, traders and consumers. Their ability to expand, however, can be constrained by limited working capital, insufficient collateral and restricted access to foreign-currency funding.
Women-owned enterprises can face additional financing barriers, making the dedicated allocation under the new facility particularly relevant. By directing at least half of the funding towards women-owned businesses, the arrangement creates a defined channel through which eligible enterprises can seek additional working capital and support for business activities.
The agriculture-related allocation also reflects the financing needs of a sector that often requires funds across several stages, from production and procurement to storage, processing and distribution. For businesses operating in agricultural supply chains, timely access to working capital can be crucial to maintaining operations and meeting market demand.
BRAC Bank said its broad branch and service network will be used to extend financing opportunities to entrepreneurs while also helping businesses connect with regional and international supply chains.
The facility is therefore expected to have significance beyond an increase in the bank’s lending capacity. By directing funds towards women-owned enterprises, agriculture-related businesses and firms engaged in international trade and manufacturing, the arrangement could widen access to formal finance for sections of the private sector that require capital to sustain and expand their operations.
For Bangladesh’s smaller businesses, the availability of suitable working capital remains closely linked to their ability to maintain production, purchase inputs, enter new markets and create employment. The new financing facility provides BRAC Bank with additional resources to support those activities while strengthening its role in SME and foreign-currency financing.
