BRAC raises $32 million in impact notes redux

A $40 million debt raise in 2022 helped Bangladesh-based microfinance institution BRAC International secure the capital it needed to help its in-country operations in Asia and Africa recover from the Covid pandemic. The impact notes were an efficient way to fundraise for an organization that operates in countries where many investors are disinclined to go.

“It’s not just efficient to raise all at once; having a reliable source of funding across the group was important to the organization,” said Courageous Capital’s Laurie Spengler, a BRAC advisor who helped design the note program.

BRAC has now secured $32 million in its second impact note series, with investors Global Partnerships and French development finance institution Proparco reupping their commitments, and Belgian DFI BIO and family office Ceniarth participating for the first time.

Hanan Fariyel and Abhijit Gupta teed up the series for BRAC.

Local capital supplement

Committed capital from the notes goes to BRAC International and is then distributed to local country offices as needed. Each country office is meant to first secure local currency funding as its principal source of capital for lending.

BRAC International is likely to issue more such notes in the future.

“The aspiration when setting up the notes program was to build something that could be a reliable, regular source of debt to support BRAC’s global footprint,” said Spengler.

Investing in women

BRAC, one of the largest NGOs in the world, runs microfinance institutions in eight countries. Its local operations have reached more than 870,000 borrowers, nearly all of whom are women. Funding from the second impact note series will support BRAC’s operations in Tanzania, Uganda, Liberia and Sierra Leone.

“Africa has the highest share of female enterprises in the world, yet women receive only a fraction of the capital needed to grow their businesses,” said BRAC International’s Bridget Dougherty. “We must continue to mobilize resources to reach the millions of women who are still left behind in accessing responsible financial services.”