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BRAC Africa Loan Fund and International Loan Facility

Raising aligned capital to extend microfinance in Africa and elsewhere


YEARS

2008, 2013

CLIENT DESCRIPTION

BRAC is the world's largest development organisation, whose efforts to alleviate poverty touch the lives of 135 million people in 11 countries in Asia, Africa and the Caribbean.

CLIENT'S OBJECTIVE

Raise capital to expand operations, first in 2008 to extend services into east Africa (BRAC Africa Loan Fund), and then again in 2013 to support BRAC's expanding microfinance operations outside of Bangladesh.

Results

BUSINESS RESULTS

In 2008, assisted BRAC in raising $62 million in debt financing which allowed BRAC to expand its microfinance services through more than 200 branches in Uganda, Tanzania and South Sudan.

In 2013, helped raise more than $17 million through the BRAC International Loan Facility in order to strengthen BRAC’s east Africa operations and to position BRAC to raise further debt capital to support its expanding international microfinance operations outside Bangladesh.

SOCIAL & ENVIRONMENTAL OUTCOMES:

In Uganda and Tanzania, BRAC now serves more than 205,000 borrowers with a loan portfolio of $45 million.

Under the BRAC International Loan Facility, BRAC will be able to continue to grow while serving poorer communities and households in rural areas, maintaining an average loan size below $400.

Activities

Prepared detailed financing models; conducted country and Dhaka visits to structure all aspects of the facility.

Negotiated with lenders the terms of the facility and supported the legal closing.

Monitored entities on behalf of investors as servicer of the loan facility.

Managed the flow of funds from investors to BRAC’s microfinance organisations, as well as BRAC’s repayments to investors.

Advised on restructuring and refinancing the BRAC African Loan Fund, creating a successor facility, the BRAC International Loan Facility.

Continue to function as the servicing agent for the BRAC International Loan Facility.

LEARNINGS

Combining BRAC’s exceptional skill in creating and operating microfinance organisations with Enclude’s experience in mobilizing loan finance has allowed BRAC to reach investors with more commercial return expectations but also more extensive resources than its historic base of philanthropic funders. As a result, BRAC now has greater capacity to support its growing international operations (currently active in 10 countries) beyond its Bangladeshi roots.The success of the transaction was grounded in our focus on aligning the capital to be invested ¬†with the business and mission objectives of BRAC. Specifically, we worked with all parties to ensure that the amount, type and pricing of the loans would support BRAC’s business model of focusing on poor households and communities while satisfying investors’ financial and development objectives.