Posted on September 19, 2008 - by James

Standard Chartered Lends $5m to Bangladesh Microfinance Institutions…

Standard Chartered Bank (SCB) signed two facility agreements worth USD 5 million with top ranked Microfinance Institutions in Bangladesh. As per the agreements signed in the last week of August 2008, Standard Chartered has disbursed Short-term revolving loans worth USD 3.65 million to BURO Bangladesh and USD 1.45 million to Shakti Foundation. The MFIs will use the funds to grow their microfinance portfolio to bring changes to the lives of around 160,000 poor people all over Bangladesh. The country’s central bank has recently stated that only 13 percent of the population has access to formal banking services.

Established in 1990 BURO Bangladesh was one of the first MFIs in Bangladesh to articulate a clear, unequivocal commitment to achieve financial sustainability. The organization is responsive to the diverse financial needs of customers. In addition to the regular microcredit program, it provides agriculture loans to small and marginal farmers and stepped up loans to graduated clients called enterprise loan.

Shakti Foundation is one of the top ranked NGOs in Bangladesh pioneering urban microfinance in the country. Since its inception in 1992, SFDW has been working in the slums and squatters all over the country for the social and economic empowerment of the poor women. To achieve this objective the organization believes in an integrated approach which is credit plus approach.

The Bangladesh micro-finance sector is regarded as the largest and most efficient in the world. From being development partner-supported entities, increasingly Bangladeshi MFIs are moving towards self-sufficiency through commercialization of financing sources and improving internal control mechanism. These two deals in Bangladesh demonstrate SCBs role in providing commercial funding and supporting MFIs to be self sufficient.

The deals also show SCB’s continued commitment towards providing and arranging for funding USD 500 million for the Microfinance sector. In 2007, alone SCB Bangladesh had made arrangements for microfinance facilities worth USD 70 million.