BRAC Plans To Get Into Impact Investment
BRAC is in transition. The development giant is going through a major transformation and plans to change its entire financing strategy, a move BRAC management considers incredibly important for its long-term sustainability. The mission, in short, is to turn BRAC into a self-reliant social enterprise so that it can continue to making impact independent of changes in donor funding.
Over the past years, it has come a long way to achieving that goal. About 70% of BRAC’s annual budget, which is about $1 billion, currently comes from its own resources including microfinance program and the enterprises. The largest NGO in the world is now considering to get into impact investment.
BRAC has been an active investor in a good number of private companies. It has invested in companies like BRAC Bank, IPDC, Delta BRAC Housing, Maya, bKash (through BRAC Bank) and a few others. And success rate for BRAC is extraordinary. As part of its current transformation strategy, it plans to do more in the space. In a recent interview with Future Startup, Asif Saleh, Senior Director of Strategy, Communications and Empowerment at BRAC, says BRAC is seriously considering investment as an approach going forward to amplify its impact. Although it has yet to come up with a concrete plan how to go about it, but it is rigorously considering impact investment and other options in the space:
The world is changing fast and naturally, we would not be able to do everything on our own. At the same time, there are people and organizations that are working towards the same mission as we are.
We want to capture some of the values that these organizations are generating while also helping them with our resources to better accomplish their goals.
For instance, Maya is creating the same kind of space for urban women that we created for rural women 25 years ago. We saw social benefits in Maya and wanted to be a part of it.
We have not thought it through yet but what we are seeing is that 15-20 years down the line we will have a galaxy of companies supported by BRAC working toward the similar vision. It can be through direct investment or it can be through an impact investment fund. We are looking at various options right now. Investment is an area we are exploring much more rigorously to amplify our impact.