Manila, Philippines – October 7, 2016 – The Asian Development Bank (ADB) has entered into an agreement with Citi to expand local currency lending to the microfinance sector under the Microfinance Risk Participation and Guarantee Program. Under the agreement, ADB and Citi will together facilitate up to $100 million of local currency loans to microfinance institutions in developing Asia.
“We’re excited to partner with Citi, an established player in microfinance in many countries in developing Asia,” said Christine Engstrom, Director in the Private Sector Operations Department. “Our 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.”
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.
Commenting on the partnership, Rajesh Mehta, Regional Head of Treasury and Trade Solutions for Citi Asia Pacific said, “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.”
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. More than $200 million private sector co-financing has been raised so far through the program.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2015, ADB assistance totaled $27.2 billion, including co-financing of $10.7 billion.
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. 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, transaction services, and wealth management.