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| Citi Foundation grants form a significant part of Citi's community investment in Asia Pacifiic. |
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| View Citi Foundation grants |
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There is increasing recognition that a robust microfinance industry is instrumental in reducing global poverty. In order to strengthen the industry, Citi believes that a combination of philanthropic and commercial microfinance initiatives is needed. |
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| Our philanthropic support – Citi Foundation www.citigroupfoundation.org grants support the development of a broad range of microfinance institutions (MFIs) so that they can provide low-income individuals with greater access to financial services, and evolve into commercially self-sustaining organisations. Since 1997, |
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| in Asia alone, the Citi Foundation has committed more than US$17 million in funding for microfinance-related programmes. |
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Our commercial activities – Citi Microfinance www.citigroup.com/citigroup/microfinance establishes commercial relationships with leading MFIs, microfinance networks and investors as partners and clients to provide innovation, financing and product development; local currency funding and transaction services; corporate finance solutions; credit, savings, insurance and remittance products, and risk assessment. Citi
Microfinance currently has commercial relationships with more than 70 MFIs in over 35 countries – including Bangladesh, India and the Philippines – as well as global microfinance networks, specialised fund managers, and investors. |
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Promoting Partnerships and Alliances in the Microfinance Sector
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| South Asia is generally viewed as the birthplace of microfinance, and thousands of microfinance institutions (MFIs) are now operating in Asia. However, many of these MFIs are very small with limited reach, and according to Asian Development Bank (ADB) estimates, around 200 million low-income households in this region still have no access to financial services. |
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| To help MFIs increase the reach and range of services delivered to the poor, Citi Asia Pacific announced a US$570,000 Citi Foundation grant in 2007 for a two-year capacity-building programme covering 10 Asian countries including China, Bangladesh, India, Indonesia, Philippines, Sri Lanka and Vietnam. |
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| The programme has been developed and implemented by the Foundation for Development Cooperation (FDC) www.fdc.org.au and the Banking With The Poor Network (BWTP) www.bwtp.org and builds on a previous Citi Foundation capacity-building grant which included disaster management training for MFIs in tsunami-impacted areas and the first Asia Microfinance Forum held in Beijing in 2006. |
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| A key component of the new programme is a specially designed training initiative to increase the ability of microfinance providers to form public-private partnerships and strategic alliances in order to strengthen the scale, scope and quality of their products and services. |
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| In late 2007, FDC published a comprehensive set of training materials on Capacity Building for Partnerships in Microfinance after testing them with over 160 microfinance practitioners in three workshops in New Delhi, Colombo and Jakarta, and undertaking rigorous peer review and technical editing with experts in the microfinance field, including the World Bank and ADB. These materials are now being disseminated through additional workshops in Asia, and are also available via the BWTP website www.bwtp.org and as CD-ROMs. |
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| Under the two-year grant announced in 2007, FDC and BWTP will also organise the Asia Microfinance Forum in Vietnam on August 26-29, 2008 which will bring together a broad range of microfinance |
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| These specially-developed training materials funded by Citi, have already been referenced by a wide range of microfinance stakeholders from 22 countries and are available through the Banking With The Poor Network website www.bwtp.org. |
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| stakeholders to discuss future trends and opportunities within the sector. |
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| Strengthening Microfinance Networks in Asia Pacific |
| The Citi Network Strengthening Program is a three-year, US$11.2 million global initiative, in collaboration with the Small Enterprise Education and Promotion (SEEP) Network www.seepnetwork.org. This project will help to increase the capacity and scale of the microfinance sector by strengthening the operational, technical and financial capabilities of 12 national and regional microfinance networks around the world, addressing the challenges that the sector is facing, and promoting growth and development of the microfinance industry. |
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In Asia Pacific, microfinance networks that represent over 500 microfinance institutions and more than 11.3 million clients will be involved in network capacity assessments, regional or local microfinance industry assessments, strategic and business plan development, and receive specialised technical
assistance tailored to each network's individual needs. The participating networks in Asia Pacific are the Banking With The Poor Network (BWTP) www.bwtp.org, the China Association for Microfinance www.chinamfi.net, Sa-Dhan in India www.sa-dhan.org, and the Microfinance Council of the Philippines www.microfinancecouncil.org |
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| Supporting the Commercial Development of Asia’s Leading Microfinance Institutions |
| Citi Microfinance significantly expanded its commercial activities in Asia in 2007, especially in India where Citi arranged financing and savings products to help partner MFIs reach more than 630,000 individual customers in over 7,000 villages across 14 states. |
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| Specific transactions launched in 2007 included: |
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A ground-breaking US$44 million risksharing finance structure, whereby Citi India is purchasing loans originated by SKS Microfinance www.sksindia.com, and sharing in the credit risk of each transaction. Grameen Foundation www.grameenfoundation.org is also providing a limited guarantee to SKS. The programme enables SKS to grow its portfolio by financing incomegeneration loans of US$125 to US$625 for an additional estimated 200,000 unbanked citizens spread across 6,000 villages in 11 states.
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An innovative remittance distribution arrangement formed with BRAC www.brac.net. Under the agreement, BRAC has opened up access to more than 3,000 payment points, including remote corners of Bangladesh, to facilitate the transfer of workers' remittances that come through Citi from all over the world. This is part of an extensive commercial relationship with BRAC. In 2006, Citi co-arranged and invested in the first AAA local currency securitisation of microloans for BRAC. In 2008, Citi launched a five year US$53 million Taka equivalent financing agreement for BRAC, which includes a local bank syndicated loan and risk sharing tranches with IFC and OPIC.
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A US$3 million, two-year term loan facility with CARD (Center for Agriculture and Rural Development Inc.) www.cardbankph.com, one of the largest MFIs in the Philippines. Proceeds of the loan have been used to fund CARD’s loan portfolio expansion plan. The facility was made available by Citi with the support of the Grameen Foundation and OPIC as part of a US$100 million global microfinance local currency lending programme established in 2006.
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| Shirley Guirangaya, 47, from Marikina City, Philippines was able to expand her small 'sarisari' (retail) business after participating in the Citi-funded Microenterprise Development Programme implemented by the ABS CBN Bayan Foundation www.abs-cbnbayanfoundation.com. Since September 2007, over 435 microentrepreneurs have attended training sessions on market research, marketing, business mapping, negotiation skills, and basic financial management. |
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For Sanjukta Patnaik from Arisole village in Orissa, a series of microloans from one of Citi India Microfinance Group’s clients, Asmitha Microfin Limited, has enabled her to start her own small enterprise making embroidered household textiles. |
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