Dhaka, Bangladesh (BBN)- Bangladesh’s micro-financing operation is likely to get a boost as a US agency has approved US$250 million to expand partnership with Citi in micro-lending worldwide, officials said.
The Board of Directors of the Overseas Private Investment Corporation (OPIC), private financing arm of the US government, approved up to $250 million on Wednesday to expand a successful partnership with Citi that provides microfinance lending to borrowers in emerging markets worldwide.
Bangladesh is the birth place of micro-credit. Citibank Bangladesh has done large scale transactions for the micro-finance institutions (MFIs) in the country, which include world’s first micro-credit securitization for BRAC, risk sharing program with OPIC and IFC for BRAC and financing of rehabilitation program for post cyclone ‘sidr’ for multiple MFIs.
"We've been working with the leading MFIs in Bangladesh. The program will facilitate our financing in Bangladesh," a Citigroup official said.
The official also said Citibank has also arranged syndication and first ever backstopped facilities for BRAC, first ever agricultural syndication in Bangladesh.
The US-based Citibank has also signed agreement with MFIs for distribution of remittances across the country, he added.
The project represents the expansion of a $100 million OPIC-Citi micro-financing funding facility launched in December 2006. Under this program, Citi and OPIC are providing financing to 23 MFIs in 13 countries, a joint press statement said.
"Citi has long been committed to globally expanding access to financial services to micro-entrepreneurs. 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 micro-entrepreneurship and stimulating economic growth," Chief Executive Officer of Citi Vikram Pandit said in the statement.
“The global economic crisis has significantly curtailed microfinance lending, raising the cost of lending and causing liquidity problems for many MFIs,” OPIC Acting President Dr. Lawrence Spinelli said.
“MFIs need access to markets and funding to continue their work. By expanding an existing and successful micro financing facility with Citi, OPIC is working proactively to help address this shortfall,” Dr. Spinelli added.
Citi works globally with over 100 microfinance institutions, networks and investors in more than 40 countries including Bangladesh, 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.
BBN/SS/SI/AD-24September09-2:16 am (BST)