BRAC has received approval from Microcredit Regulatory Authority (MRA) to issue zero-coupon bonds valued Tk 1,350 crore through private placement.
This is the first issuance of a zero-coupon bond by a non-governmental organisation in Bangladesh's history of microcredit, said a press release on Saturday.
Executive vice-chairman of MRA Md Fashiullah handed over the approval letter to Tushar Bhowmik, the chief financial officer of the country’s largest microcredit provider, in a small ceremony arranged by MRA on its own premises on Thursday afternoon, read the release.
“Client’s savings and bank borrowings was the main source of funds for BRAC Microfinance. Now Bond issuance also comes as an alternative source of funding for the microcredit institutions,” BRAC CFO Tushar Bhowmik said.
He added that it was great recognition for the microfinance sector and expressed gratitude to all regulatory bodies for the cooperation along the way.
Earlier on February 3, Bangladesh Securities and Exchange Commission (BSEC) also approved the issuance of these zero-coupon bonds worth Tk 1,350 crore.
The bond is unsecured, non-convertible, and fully redeemable with its tenure from one and a half years to five years. Institutional investors, corporates and high net worth individuals will be eligible to purchase this bond with a multiple of Tk 1 crore.
BRAC expects the bonds will help improve the livelihoods of people who need access to affordable financial solutions, especially in marginalised communities, in a more efficient way.
