Press release from Business Wire India
Source: Citi
Thursday, September 24, 2009 05:18 PM IST (11:48 AM GMT)
Editors: General: Consumer interest; Business: Advertising, PR & marketing, Banking & financial services, Business services, Financial Analyst
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OPIC Board Approves Participation in a $250 million Global Microfinance Financing Program with Citi
Mumbai, Maharashtra, India, Thursday, September 24, 2009 -- (Business Wire India) -- The Board of Directors of the Overseas Private Investment Corporation (OPIC) today approved up to $250 million to expand a successful partnership with Citi that provides microfinance lending to borrowers in emerging markets worldwide. The facility has the potential to reach more than 480,000 borrowers.
OPIC will risk participate in Citi originated and funded local currency loans to microfinance institutions (MFIs), which in turn make small loans to micro-borrowers in Africa, the Middle East, Asia, Eastern Europe and Latin America. The project represents the expansion of a $100 million OPIC-Citi microfinancing funding facility launched in December 2006. Under this program, Citi and OPIC are providing financing to 23 MFIs in 13 countries.
"The global economic crisis has significantly curtailed microfinance lending, raising the cost of lending and causing liquidity problems for many MFIs," said OPIC Acting President Dr. Lawrence Spinelli. "MFIs need access to markets and funding to continue their work. By expanding an existing - and successful - microfinancing facility with Citi, OPIC is working proactively to help address this shortfall."
Dr. Spinelli noted that OPIC and Citi's Export and Agency Financing group have partnered in providing financing to emerging-market borrowers for more than a decade, through a series of risk-sharing arrangements set forth in framework guaranty facility agreements: as of June 30, OPIC had 18 such framework agreements with Citi. To date, there have been no payment defaults on any of the guaranteed loans.
Citi works globally with over 100 microfinance institutions, networks and investors in more than 40 countries, as clients and partners, with the objective of expanding access to financial services, including savings, financing, remittances, and insurance, on a scalable and sustainable basis.
"Citi has long been committed to globally expanding access to financial services to microentrepreneurs. Leveraging Citi's emerging markets presence, this new Citi/OPIC $250 million Global Program will provide incremental funding to achieve our shared objectives of supporting microentrepreneurship and stimulating economic growth," said Vikram Pandit, Chief Executive Officer of Citi.
OPIC uses the framework agreements to mobilize private capital in host countries, extend the term of available financing in support of local development, and increase host country liquidity. The agreements enable OPIC to efficiently channel private capital to support host-country developmental needs by leveraging in-country bank skills and assets.
The microfinance sector has experienced rapid growth and attracted significant investment, particularly from the private sector. However, only a small portion of those that lack access to financial services are currently served. A wide spectrum of microfinance institutions continue to be in the forefront of designing and delivering appropriate financial services to the unbanked. This program will support MFIs to expand their outreach and achieve scale in financing microentrepreneurs around the world.
About OPIC
OPIC was established as an agency of the U.S. government in 1971. It helps U.S. businesses invest overseas, fosters economic development in new and emerging markets, complements the private sector in managing risks associated with foreign direct investment, and supports U.S. foreign policy. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers.
OPIC's political risk insurance and financing help U.S. businesses of all sizes invest in more than 150 emerging markets and developing nations worldwide. Over the agency's 38-year history, OPIC has supported $188 billion worth of investments that have helped developing countries to generate over 830,000 host-country jobs. OPIC projects have also generated $72 billion in U.S. exports and supported more than 273,000 American jobs. Visit OPIC on the web at www.opic.gov.
Citi
Working across Citi's businesses, product groups and geographies, Citi Microfinance serves more than 100 microfinance institutions (MFIs), networks and investors as clients and partners in over 40 countries with products and services spanning the financial spectrum - from financing, access to capital markets, transaction services and hedging foreign exchange risk, to credit, savings, remittances and insurance products - to expand access to financial services for the underserved. www.citi.com/citi/microfinance.
Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 140 countries. Through its two operating units, Citicorp and Citi Holdings, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Additional information may be found at www.citigroup.com or www.citi.com.
CONTACT DETAILS
Indu Aishwerya Anand, Corporate Affairs, Citi India, +91 (124) 4186766, indu.anand@citi.com
Shreela Roy, IPAN Hill & Knowlton, +91 9820149119, shreela.roy@ipan.com
Lina Gokarn, IPAN Hill & Knowlton, +91 9920321565, lina.gokarn@ipan.com
KEYWORDS
CONSUMER, MARKETING, BANKING, BUSINESS SERVICES, Financial Analyst
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