47631 - DCM DBH Housing

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Summary of Investment Information

Project Number

47631

Company Name

DBH FINANCE PLC

Date SPI Disclosed

Sep 18, 2023

Country

Bangladesh

Region

South Asia

Projected Board Date

Oct 31, 2023

Environmental Category

FI-3 - No Impact

Status

Active

Last Updated Date

Mar 9, 2024

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Dec 12, 2023
Signed : Dec 28, 2023
Invested : Feb 28, 2024

Sector

Finance Companies

Additional Project Attributes

Blended Finance
Public-Private Partnerships

Project Description

The proposed investment comprises up to US$30 million equivalent investment in DBH Finance PLC. (DBH or the Company) through subscription in of Bangladeshi Taka (BDT) denominated senior bond to be issued by DBH. DBH, established in 1996, is a housing finance institution in Bangladesh that primarily provides loans for the purchase and construction of homes. The proceeds of the bond will be primarily used to grow the Company’s affordable housing portfolio. IFC may also explore supporting the Company to mobilize up to US$25 million from other investors for its bond issuance.

The proposed project would contribute to affordable housing and long-term debt capital market development in Bangladesh. The Project is expected to be supported by the IDA20 Private Sector Window Local Currency Facility (“IDA PSW LCF”) as described in the Blended Finance Section.

Associated Advisory Engagement

The advisory project aims to support DBH in developing and strengthening the affordable housing loan product by establishing a value proposition for the affordable housing segment and helping DBH to effectively target the lower-middle income segment in the country. The project design also integrates the adoption of digital tools and infrastructure in affordable housing finance. Under the project, IFC will assist DBH to:

i) Assess their current state of the business model and operations in affordable housing finance as well as digital capabilities.

ii) Introduce international best practices in client sourcing, underwriting, servicing, portfolio management, and capacity-building programs to strengthen the affordable housing product and services and penetrate deeper into the affordable housing market in the country.

iii) Enhance DBH's home loan credit assessment procedures by focusing on informal income assessment for affordable home loans,

Accelerate digital adoption and data analytics to reduce cost, offer faster and better delivery of customer services and improve the portfolio.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	30.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Housing Loans to Individuals

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

Increased access to affordable housing finance: The investment is expected to deliver increased access to housing finance for urban households by enabling DBH’s focus on this segment. Contribution to market creation: Inclusiveness - The investment is anticipated to increase market inclusiveness in the housing market by demonstrating a viable lending product that caters to the financing needs of middle-income households and will foster replication.

IFC’s additionality in the proposed project will be both financial and non-financial. Financial additionality is in the form of financing structure, through providing longer-term local currency funding that is not readily available in the market. Non-financial additionality is provided through knowledge and capacity building through IFC’s potential advisory support to help the Company scale up its affordable housing finance program, making mortgages available to underserved households while efficiently managing the related risks.

Contacts

For Inquiries About the Project, Contact

DBH Finance PLC
Nahid Ahmed
Head of Treasury
+8809612334455, Ext 142
dbh@dbhfinance.com
Landmark Building (14th Floor), 12-14 Gulshan North C/A, Gulshan 2, Dhaka-1212
www.dbhfinance.com

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This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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