Microfinance

Commercial Activities

Citi Microfinance works with Citi businesses around the world to establish commercial relationships with microfinance providers.

Citi Microfinance builds on the strengths of partner microfinance institutions (MFIs) to jointly develop new products, reduce costs, manage risks, diversify funding, and expand their outreach and scale.

Our products and services span the financial spectrum - from financing, access to capital markets, transaction services and hedging foreign exchange risk, to credit, savings, remittances and insurance products.

Citi Microfinance is active in more than 40 countries – including Bangladesh, India and the Philippines – and serves over 100 MFIs, global networks and investors worldwide.

Philanthropic Support

For more than 25 years, Citi Foundation grants have supported the development of a wide range of MFIs so that they can provide the poor and unbanked with greater access to financial services and evolve into commercially self-sustaining organisations.

Over the last decade, the Citi Foundation has granted more than US$60 million in support of 250 microfinance programmes and organisations across 55 countries.

Since 1997, in Asia alone, the Citi Foundation has committed more than US$19 million in funding for microfinance-related programmes.

Citi supports the development of the microfinance sector in Asia through a combination of philanthropic and commercial initiatives

Citi Microfinance - Bangladesh Partnerships

In 2008, Citi Microfinance provided commercial support to several MFIs in Bangladesh:

US$10 million local currency (Bangladesh Taka - BDT) facility to help ASA, one of the world’s leading MFIs, diversify its funding sources and disburse more funds to a larger number of microentrepreneurs

US$65 million local currency facility for several MFIs – including BRAC, BURO, the Shakti Foundation for Disadvantaged Women and Thengamara Mohila Sabuj Sangha – to support microcredit and small and medium enterprise financing following the Sidr cyclone in November 2007

In addition, Citi Microfinance extended its long-term relationship with BRAC, which started in 2006 when Citi provided financing to BRAC through the first AAA-rated local currency securitisation of microfinance loans. Citi supports the development of the microfinance sector in Asia through a combination of

Citi Microfinance has provided commercial support to microfinance institutions in Bangladesh, India and the Philippines. In India, Citi partners include SKS, which provides small but vital loans to microentrepreneurs such as this woman making footwear in Rajasthan.

philanthropic and commercial initiatives Citi Microfinance has provided commercial support to microfinance institutions in Bangladesh, India and the Philippines. In India, Citi partners include SKS, which provides small but vital loans to microentrepreneurs such as this woman making footwear in Rajasthan. BRAC is the largest non-governmental organisation in the world offering microfinance and development programmes across all 64 districts in Bangladesh, and has nearly seven million borrowers.

Citi Microfinance helped to bolster BRAC’s microcredit and lending to small and medium enterprises in 2008 through two major financing facilities:

US$22 million in local currency provided by Citi and the International Finance Corporation (IFC) with a fiveyear amortisation structure and a US$18 million partial credit guarantee from IFC

US$20 million in local currency provided by Citi and the Overseas Private Investment Corporation (OPIC) with a five-year amortisation structure and US$15 million risk sharing by OPIC

Citi Foundation Grants

Network Strengthening

The Citi Network Strengthening Program is a three-year, US$11.2 million international grant program launched in 2007 in collaboration with the Small Enterprise Education and Promotion Network (SEEP) and 12 regional and country-based microfinance networks.

This pioneering initiative is designed to strengthen the operational, technical and financial capabilities of these networks so that they are more effective in promoting the growth and development of the microfinance industry across the developing world.

The participating networks in Asia Pacific are the Banking With The Poor Network, China Association for Microfinance, Microfinance Council of the Philippines (MCPI), and Sa-Dhan in India.

During the first year of the programme in 2008-2009, these networks engaged in self-assessments and local industry assessments, developed strategic business plans, and established goals and milestones.

As a result, the four Asia Pacific networks’ membership has increased by 14%, and their members have reported 3.5 million new microfinance clients and a US$343 million increase in their loan portfolios.

The second year of the programme is focusing on peer learning, providing technical assistance and other impact metrics that will measure overall network success.

Asia Microfinance Forum 2008

In Asia, Citi has been involved in the microfinance sector for over 10 years and has given Citi Foundation microfinance grants in Bangladesh, China, India, Indonesia, the Philippines, South Korea, Thailand and Vietnam.

To help build the capacity of microfinance providers across the region, the Citi Foundation is the lead sponsor of the Asia Microfinance Forum. The second Asia Microfinance Forum was held in Hanoi, Vietnam in August 2008 in partnership with the Banking With The Poor Network and the Foundation for Development Cooperation.

The Forum was highly successful, attracting more than 500 participants from 50 countries, including more than 100 microfinance practitioners from Vietnam.

Piyush Gupta, CEO, South East Asia Pacific, Citi speaking at the opening of the second Asia Microfinance Forum, which was held in Hanoi, Vietnam in August 2008 and attracted more than 500 participants from 50 countries.

The three-day conference focused on the challenges and innovations that will have the greatest impact on microfinance in the coming decades, especially in Asia.

Event sponsors and supporters included the IFC, PlaNet Finance, State Bank of Vietnam, Vietnam Bank for Social Policies, and Vietnam Microfinance Working Group.

“The publicity surrounding the Asia Microfinance Forum and the participation of scholars and government officials helped streamline their view of microfinance. They now recognise that microfinance can be provided by any type of financial institution – large banks, tiny MFIs or even small projects. Local microfinance advocates and multilaterals had been trying to achieve this for many years, but it became obvious after the Asia Microfinance Forum.”

Phan Cu Nhan Director,
International Cooperation Dept, Vietnam Bank for Social Policies