BRAC Bank has secured a $50 million financing facility from an international financial institution to expand funding for micro, small and medium-sized enterprises (MSMEs) in Bangladesh, with a particular focus on women-owned businesses and agriculture-based enterprises.
The financing will be channelled through the bank’s offshore banking unit and structured as an unsecured working capital facility. It will initially have a one-year maturity, with the possibility of two subsequent annual renewals. If fully renewed, the facility could therefore remain in place for up to three years.
A significant feature of the agreement is the allocation requirement for women-owned businesses. At least 50 per cent of the facility, or the equivalent amount in local currency, will be directed towards enterprises owned by women. At least another 25 per cent is earmarked for agriculture-related MSMEs.
The targeted allocation is expected to widen access to formal financing for businesses that can face difficulties securing adequate working capital. Smaller enterprises often have limited collateral and may find it harder to obtain financing on conventional terms, particularly when they require funds for business expansion, imports or other trade-related activities.
The facility will also strengthen BRAC Bank’s capacity to provide foreign currency financing. This could benefit businesses involved in international trade that require funding to import capital machinery, raw materials and other inputs. Access to foreign currency financing can be particularly relevant for enterprises whose operations depend on overseas suppliers or cross-border trade.
Tarik Refat Ullah Khan, Managing Director and Chief Executive Officer of BRAC Bank, said the investment reflected the international lender’s confidence in the bank’s financial strength, governance and experience in financing small and medium-sized businesses.
According to him, the new facility would broaden access to finance for enterprises that play an important role in Bangladesh’s economy. Women entrepreneurs, agriculture-based businesses, manufacturers and companies engaged in international trade are among those expected to benefit from the additional financing capacity.
The latest facility is the fourth consecutive financing arrangement provided to BRAC Bank by the international financial institution. It also reflects the continuation of a long-standing partnership between the two organisations, centred on expanding financial inclusion and supporting private-sector development in Bangladesh.
The financing comes under a dedicated small and medium-sized enterprise fund within the international institution’s MSME financing platform. Such financing mechanisms are designed to channel funds through financial institutions to businesses in developing economies that may have comparatively limited access to conventional sources of capital.
MSMEs form a significant part of Bangladesh’s economic landscape. They contribute to employment, local production, trade and supply chains across a wide range of sectors. Yet many smaller businesses continue to face challenges in obtaining sufficient working capital, particularly when they lack the collateral normally required for bank loans.
Women-owned enterprises can face additional financing constraints as they seek to establish, expand or modernise their businesses. By reserving a substantial share of the new facility for women-owned companies, the agreement creates a defined financing channel for this segment.
Agriculture-related businesses are also receiving specific attention. Financing can be used across different stages of agriculture-linked commercial activity, including the purchase of inputs and the working capital required to maintain business operations. The 25 per cent allocation under the agreement is intended to strengthen access to funding for eligible enterprises in this area.
BRAC Bank said its extensive branch and service network would be used to make financing more accessible to entrepreneurs. The bank also aims to help businesses strengthen their links with regional and international supply chains.
The new facility therefore extends beyond simply increasing the bank’s lending capacity. It provides additional scope to direct finance towards women-owned and agriculture-based enterprises while strengthening foreign currency funding for businesses involved in trade and production.
For Bangladesh’s smaller businesses, improved access to working capital can be critical to maintaining day-to-day operations and pursuing growth opportunities. The effectiveness of the facility will ultimately depend on how efficiently the funds reach eligible enterprises and translate into productive business activity. If deployed as intended, the financing could support greater access to capital across parts of the MSME sector while contributing to business expansion, trade and employment.