Bangladesh Rural Advancement Committee (BRAC) has become the first non-governmental body in the country to receive approval from the Microcredit Regulatory Authority (MRA) to issue zero-coupon bonds worth Tk 1,350 crore. Zero-coupon bonds, also known as discount bonds, don't generate periodic coupons or interest for investors like typical bonds. Investors get a lump sum on maturity. Issuance of zero-coupon bonds by a non-governmental organisation is the first in the microcredit history of Bangladesh, according to a release. Executive vice chairman of MRA, Md Fashiullah handed over the approval letter to chief financial officer of BRAC Tushar Bhowmik on August 5. Read: Brac to work on protecting employees from exploitation, abuse MRA executive director Laxman Chandra Debnath, directors Muhammad Mazedul Haque and Md Nure Alom Mahadi, and BRAC associate director Ashit Baran Das were also present. Earlier on February 3, Bangladesh Securities and Exchange Commission (BSEC) also approved the issuance of this zero-coupon bonds valued at Tk 1,350 crore. The bond is unsecured, non-convertible, and fully redeemable with its tenure from one-and-a-half to five years. Institutional investors, corporates and high net worth individuals will be eligible to purchase this bond in multiples of Tk 10 million. RSA Advisory Limited is acting as the lead arranger of this issue and MTB Capital Limited is the trustee to the issue. “Client’s savings and bank borrowings was the main source of funds for BRAC Microfinance. Now Bond issuance also comes as an alternative source of funding for the microcredit institutions,” BRAC CFO Tushar Bhowmik said. The CFO expected that the bonds would open up avenues for non-lender institutions to invest in BRAC's microfinance programme. Read: Brac to launch antigen testing Saturday He said that it is a great recognition for the microfinance sector and expressed gratitude to all regulatory bodies for the cooperation along the way. BRAC expects that the bonds will help improve the livelihoods of people who need access to affordable financial solutions, especially in marginalised communities, in a more efficient way, the release said.