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This letter was originally sent to LightCastle Bimonthly Newsletter subscribers.
Bangladesh has achieved remarkable success in the last decade with a higher than South Asia average GDP per capita, an economy touching almost half a trillion dollars and a growing middle and affluent class.
However, inequality is at an all-time high and we are in the midst of growing inflation and economic exclusions. Bangladesh is not an exception. How do we change the status quo and progress from here? This requires a concerted effort from all of us. One of the tools that we can use to create more collaboration and synergy is “catalytic financing”.
Catalytic financing (CF), leveraged the right way, can use existing financial provisions to mobilize additional capital and investments from different sources thereby “catalyzing” development and impact. CF can be used to initiate programs for Bangladesh that can help in inclusive development in a variety of ways; however, we do not have sufficient capital to get started.
So what are three key sectors in Bangladesh where catalytic financing can help?
So what are some of the ways CF can help? Starting from performance payments for achieving measurable and sustainable results to providing matching funds with the private sector (thus reducing cost of capital to the enterprise and de-risking investments for private investors) to acting as first loss guarantee schemes for lending to enterprises working with vulnerable groups – catalytic capital can ensure critical innovations can flourish.
At LightCastle, we are committed to working with our partners and the broader ecosystem on supporting inclusive growth for Bangladesh and the world. I welcome you to our journey and if there is a way we can add value to you, do not hesitate to reach out.
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