IFC, Citigroup close $22 mln B'desh term financing

from Reuters

DHAKA, Feb 12 (Reuters) - International Finance Corporation (IFC) and Citigroup closed a $22 million term-financing deal to expand micro-lending activities by the Bangladesh Rural Advancement Committee (BRAC), a joint statement said.

The term financing is available in local currency Bangladeshi taka (BDT) with a tenor of five years and an amortising structure, the statement said.

"To finance the growth of our microfinance operations, we need local currency financing," said Fazle Hasan Abed, chairperson of BRAC.

The statement said this financing would be beneficial to the micro-credit and small and medium enterprise segments served by it.

The loan is part of a wider Citigroup-led financing for BRAC that was mandated last year.

The $22 million IFC-Citigroup tranche includes a $18 million partial credit guarantee from the IFC. This risk-sharing partnership with IFC will enable Citibank in Bangladesh to extend additional long-term local currency funds to BRAC, the statement added.

Nearly 1,200 non-governmental organisations provide microcredit services in more than 40,000 Bangladeshi villages, where half of the population live below the poverty line.