IFC, BRAC Bank Partner to Launch Bangladesh’s First Ever Housing Bond
Thousands of low and middle-income urban and rural families in Bangladesh, often underserved by commercial banks, are expected to be able to take out affordable housing loans through IFC's investment in the country's first housing bond to be issued by GABV member BRAC Bank.
In a first for the country, IFC will make a subscription of up to $50 million-equivalent Bangladeshi taka (BDT) denominated, five-year senior bond by BRAC Bank to fund and expand its affordable housing finance program. The move is expected to create thousands of new jobs in construction and related industries.
"This marks a whole new strategic priority for BRAC Bank, since our establishment in 2001, with our goal then to improve access to finance for underserved small and medium enterprises. We, along with IFC, recognize that far too many low and middle-income earners simply cannot access the funds they need to buy a home. Now people of semi-urban areas can also fulfill their dream of owning a house with our affordable home mortgage facilities," said Selim R. F. Hussain, BRAC Bank Managing Director, and CEO.
As an investor in the first-ever privately placed housing bond issuance in Bangladesh, IFC will help deepen the country's long-term bond market which remains underdeveloped.
Through this initiative, IFC and BRAC Bank jointly aim to demonstrate a commercially viable lending product that caters to the housing finance needs of households belonging to low and middle-income households, promotes inclusive development, and creates thousands of new jobs.