The Asian Development Bank has entered into an agreement with U.S. banking giant Citi to expand local currency lending to the microfinance sector under the Microfinance Risk Participation and Guarantee Program.
Under the agreement, The Asian Development Bank (ADB) and Citi will together facilitate up to $100 million of local currency loans to microfinance institutions in developing Asia.
The new partnership will help further expand the Microfinance Program, which has already facilitated more than $370 million in local currency loans across the region since 2012. Together, Citibank and ADB will improve access to financial services to even more low-income families and small-business owners, especially in rural and remote areas in Asia and the Pacific."
Over 2 Million Borrowers Supported
Currently many microfinance institutions struggle to access funds for growth from the commercial market. Through the Microfinance Program, ADB fills market gaps by sharing risks with commercial banks to promote local currency lending to those institutions. This helps to mitigate microfinance institutions' exposure to foreign exchange risks.
«At Citi, we aim to responsibly provide financial services that enable progress and economic growth for our clients. We are honored to strengthen our collaboration with our strategic partner ADB, and hope to make more meaningful contributions to the development of the emerging markets,» said Rajesh Mehta, (pictured) Regional Head of Treasury and Trade Solutions for Citi Asia Pacific.
Backed by ADB's AAA credit rating, the Microfinance Program provides risk sharing and guarantees to international and local partner financial institutions. Since 2012, the Microfinance Program has supported more than 2 million microfinance borrowers, primarily in India, Bangladesh and Indonesia.
