IMMEDIATE RELEASE
BRAC Africa Loan Fund Launched to Combat Poverty in East Africa
(Dhaka, Bangladesh and Chicago, Illinois) – January 6, 2009
BRAC, a leading international development organization founded in Bangladesh announced that it has successfully raised $62.6 million of debt capital to provide microfinance loans to poor borrowers in Tanzania, Uganda and Southern Sudan. The BRAC Africa Loan Fund provides long-term, local-currency funding that will enable BRAC to scale up its microfinance operations to reach over 700,000 borrowers through over 200 branches across the three countries. The Fund represents the largest single financing to date of a southern hemisphere development organization expanding into Africa.
The Fund will aggregate US dollar loans from investors through a special purpose company and use the capital to make local currency loans to BRAC Uganda, BRAC Tanzania and BRAC Southern Sudan over a period of seven years. A second and final closing is planned during the first half of 2009 to reach the Fund’s target of $74.0 million.
Lenders Invest for Development and Financial Returns
The Fund attracted investment from a diverse group of investors including the Overseas Private Investment Corporation (OPIC), Triodos Fair Share Fund, Hivos-Triodos Fund, The Norwegian Investment Fund for Developing Countries (Norfund), Triple Jump, Strømme Microfinance East Africa, The Ford Foundation, The David and Lucile Packard Foundation, CARE USA, Three Guineas Fund, Calvert Social Investment Foundation, MMA Community Development, Inc., and Monarch Community Fund, LLC. BRAC has also made a significant investment as part of its commitment to the development of its African operations.
“BRAC appreciates the support of our international investors as we work to build sustainable, locally managed development programs. BRAC’s lending operations are a platform for delivering its holistic development program, including health, education and agricultural extension and training and other services to its borrowers and their communities. Because the Fund will allow us to reach hundreds of thousands of borrowers, it will help to combat poverty and improve the livelihoods of millions of people in East Africa,” said Dr. Fazle Abed, Founder and Chairperson of BRAC.
“The first closing of the Fund amidst a global liquidity and credit crisis shows the strength of the appeal to investors of investments designed to deliver both financial returns and significant development impact,” said Laurie J. Spengler, President of ShoreBank International Ltd., which raised the BRAC Africa Loan Fund.
BRAC’s Impact in Africa:
BRAC expects the Fund to be the first in a series to support multiple country services in Africa. BRAC intends to explore the development of local operations in at least ten countries over the next ten years, including both East and West Africa. In 2006, BRAC initiated operations in Tanzania and Uganda. Southern Sudan was added in 2007, and in 2008 BRAC completed registration in Liberia and Sierra Leone. BRAC’s initial portfolio of countries in Africa, with a mix of stable and post-conflict economies and large and small countries reflects its overall efforts to reach underserved communities on the continent.
“BRAC is highly respected for its proven ability to make a difference in the lives of the poor,” said Elizabeth Littlefield, Chief Executive Officer of CGAP (Consultative Group to Assist the Poor), an independent policy and research center dedicated to advancing financial access for the world's poor. “The BRAC Africa Loan Fund will provide very important access to long-term, local-currency capital in the region, which will help BRAC’s local programs achieve scale.”
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