The Centre for Development Innovation and Practices (CDIP), an NGO dedicated to the socio-economic development of disadvantaged people, is planning to expand its microfinance services by raising Tk171 crore through bonds. This move aims to better serve rural customers in Bangladesh.
The Bangladesh Securities and Exchange Commission (BSEC) recently approved CDIP’s rural development plan, which includes issuing the CDIP 1st Zero Coupon Bond. This bond will be non-convertible, fully redeemable, and unsecured, with a face value of Tk171 crores and a redemption period of three years. The funds raised will be used to support microcredit and small and medium enterprises.
BRAC Bank and its subsidiary BRAC EPL Investments are the joint arrangers of the bond, while DBH Finance PLC will serve as the trustee. Mifta Naim Huda, executive director of CDIP, stated that the organization aims to diversify its funding sources to better serve its mission.
Established in 1995, CDIP operates in three segments: microfinance, health, and education. It currently supports 246,951 families with credit facilities and 57,661 disadvantaged children with home tutoring services in 30 districts across Bangladesh. The organization has been financially self-sustainable for the past 28 years without receiving donations.
In the fiscal year 2022-23, CDIP expanded its activities to 30 districts, 166 upazilas, and 1,748 unions, covering a total of 8,095 villages. The organization disbursed loans totaling Tk2,363.80 crore, with a timely loan recovery rate of 98.19%. Additionally, CDIP’s education support program assists nearly 58,000 children from disadvantaged families through 2,711 learning centers.
The healthcare program provided primary healthcare services to 2,26,879 patients, including 4,806 children, in 19 districts. The demand for microfinance services has increased in rural areas, prompting NGOs like CDIP to turn to the bond market for funding. Other organizations, such as BRAC and Sajida Foundation, have also entered the bond market to support microfinance initiatives in Bangladesh.