Press Releases

IFC and Citi to Support Expansion of BRAC’s Microlending in Bangladesh

IFC: Minakshi Seth
Phone: +91 11 4111 1000

Dhaka, February 11, 2007- IFC, a member of the World Bank Group, and Citi, the leading global financial services institution will support BRAC’s microlending in Bangladesh with a local currency facility to benefit BRAC’s microcredit and small and medium enterprise customers.

The $22 million term facility will be made available in local currency (Bangladeshi taka), with a five-year tenor and an amortizing structure. BRAC, one of the largest microfinance institutions in the world, continues to invest in portfolio expansion. In supporting BRAC’s move to manage its balance sheet, diversify its sources of funding, and access longer-tenor financing, this innovatively structured transaction will benefit BRAC’s microcredit and small and medium enterprise customers.

The loan is part of a wider Citi-led financing for BRAC that was mandated last year. Of the $55 million equivalent in term financing, Citi is providing $42 million. The $22 million IFC-Citi tranche, which closed recently, includes an $18 million partial credit guarantee from IFC. This risk-sharing partnership with IFC will enable Citibank in Bangladesh to extend additional long-term local currency funds to BRAC.  

Fazle Hasan Abed, Chairperson of BRAC, present at the signing with IFC and Citi, said, “To finance the growth of our microfinance operations, we need local currency financing. Support from IFC and Citibank, as well as our partnership over the years, has been invaluable.”

“With this guarantee, BRAC will be able to reduce its dependence on grants for growth and expand its outreach to people, particularly women borrowers,” said Lars Thunell, IFC Executive Vice President and CEO.

“Citi is honored to support BRAC again in their microlending expansion plans in Bangladesh. Citi has a track record of several groundbreaking deals for BRAC, and IFC is also an important partner of Citi in various markets globally. We look forward to working with BRAC in the future. I would like to thank all our partners who helped make this such a successful transaction,” said Mamun Rashid, Managing Director & Citi Country Officer – Bangladesh.

Citi and BRAC have a long relationship that included issuing the world’s first triple A-rated local currency securitization of microcredit receivables in 2006. This was followed by innovative remittance distribution arrangement and the first-ever backstopped facility for a microfinance institution in 2007.

This is IFC’s first investment in BRAC, but the two institutions have a long-standing relationship, having jointly pioneered projects in housing finance and SME lending in Bangladesh.

BRAC’s microfinance and development programs cover all 64 districts in Bangladesh. It also offers microloans to women through its group-lending methodology. Nearly 1,200 nongovernmental organizations provide microcredit services in more than 40,000 Bangladeshi villages, where half the population lives below the poverty line. The country’s microfinance sector has been financed typically through contributions from donors and subsidized government funds, particularly for smaller microfinance institutions. As this funding diminishes, the sector increasingly borrows from commercial banks and taps into voluntary savings by members.

About IFC

IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit  

About BRAC

BRAC is the largest NGO in the world, with more than 100,000 employees. Diagnosing poverty in human terms and recognizing its multidimensional nature, BRAC takes a holistic approach in striving to fulfil its twin objectives of  poverty alleviation and empowerment of the poor. This approach combines economic development and livelihood-generation enterprises with health, education, and other social programs. BRAC’s outreach covers Bangladesh’s 64 districts and it has been asked to assist a number of countries, including Afghanistan, Pakistan, Sri Lanka, Sudan, Tanzania, and Uganda. It also offers microloans to women through its group-lending methodology. For more information, visit

About Citigroup Inc.

Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi's major brands include Citibank, CitiFinancial, Primerica, Citi Smith Barney and Banamex. Additional information may be found at or

Citi Microfinance Group works with microfinance institutions as partners and clients to expand access to financial services and products to the “unbanked” who are not currently reached by the formal banking sector in a commercially viable way. With a worldwide presence, Citi Microfinance Group aims to provide the sector with varied products and services, including capital markets, wholesale finance, individual credit, savings, remittances, insurance, as well as technical assistance.

Media Contacts:
BRAC: M. Anwarul Haq
Phone: +880-2-9881265/8824180 ext-2105


Citi: Mehreen Mahiuddin
Phone: +880-2-8833567 ext- 1103