MRA Executive Vice President Md Fashiullah hands over letter of approval to Tushar Bhowmik, Brac CFO Courtesy
Issue of zero coupon bond by non-governmental organization is first of its kind in the history of microcredit in Bangladesh
Brac, the largest microcredit provider in Bangladesh, received approval from the Microcredit Regulatory Authority (MRA) to issue zero coupon bonds worth Tk 1,350 crore through placement private.
The zero coupon bond issue by a non-governmental organization is the first of its kind in the history of microcredit in Bangladesh, a Brac press release read.
MRA Executive Vice President Md Fashiullah handed the highly anticipated letter of approval to Tushar Bhowmik, Brac’s chief financial officer, at a small ceremony hosted by MRA at its own premises on Thursday afternoon.
MRA Executive Director Laxman Chandra Debnath, Directors Muhammad Mazedul Haque and Md Nure Alom Mahadi and Associate Director of Brac Ashit Baran Das were also present at the ceremony.
Earlier on February 3, the Bangladesh Securities and Exchange Commission (BSEC) also approved the issuance of these zero coupon bonds valued at Tk 1,350 crore.
The bond is unsecured, non-convertible and fully redeemable with a term of one and a half to five years.
Institutional investors, companies and high net worth individuals will be eligible to purchase this bond with a multiple of Tk 10 million. RSA Advisory Limited is acting as principal arranger of this issue and MTB Capital Limited is acting as trustee of the issue.
“The client’s savings and bank loans were the main source of funding for Brac Microfinance. Now, bond issuance is also an alternative source of funding for microcredit institutions, ”said Brac CFO Tushar Bhowmik.
Read also – Brac’s Tk 1,350cr bond to boost microfinance gets green light
The CFO expected the bonds to open up opportunities for non-lending institutions to invest in Brac’s microfinance program.
He commented that this was a great recognition for the microfinance industry and expressed his gratitude to all regulators for their cooperation.
Brac expects the bonds to help improve the livelihoods of people who need to access affordable financial solutions, especially in marginalized communities, more effectively.
Brac’s journey began in Sylla, northeastern Bangladesh, in 1972. Having access to finance was necessary for people living in poverty to break the cycle.
Understanding their need, the first loans granted by Brac were in 1974 to the fishermen of Sylla.
So far, Brac’s microfinance program has reached 7.4 million clients with financial services.