Monday, April 3. 2006
Headquartered in New York, Citigroup continues to commit more dollars, through both wholesale and retail channels, to microfinance. With 2005 assets reported as $1.5 trillion and 200 million customer accounts in more than 100 countries, Citigroup is a leader in the commercial banking sector. As of January, 2006 Citigroup was ranked as the largest financial institution in the world by total assets.
Citigroup entered the world of microfinance with a mere $5,000 grant in 1965– and has now become entrenched in the sector. Citigroup takes a dual approach to microfinance– by providing millions in grants through Citigroup’s non-profit arm, while also offering financial services as a commercial partner. The commercial entity, Citigroup’s Microfinance Group, is engaged in a variety of activities with microfinance partners including foreign exchange hedging, securitization of microfinance loans, local private placements and bond issues, direct and co-financing, and cash management.
On the retail side, Citigroup’s subsidiary Citibank in India provides micro-loans and takes full credit risk under a loan agency agreement with microfinance institutions (MFIs). In Mexico, Citigroup – under the brand name Banamex- offers an insurance product, projected to reach 400,000 clients in 2006, and savings products currently reaching 40,000 microfinance clients.
On the wholesale side, Citigroup has forged partnerships with MFIs throughout the world. Citigroup provides loans to many MFI partners and, in some cases, MFIs act as an agent of Citigroup by providing Citigroup products directly to potential clients.
Citigroup is also engaged in the microfinance sector through its non-profit arm- The Citigroup Foundation. This foundation has made substantial contributions to MFIs worldwide- awarding more than $11 million in grants to 145 microfinance organizations in fifty countries in just the past four years alone- and continues to commit millions in grant funding for research and new initiatives.
Additional Resources
1. ING “A Billion to Gain? A study on global financial institutions and microfinance,” February, 2006
2. CitiGroup Presentation: “Citigroup and Microfinance: Our Commitment”
3. Citigroup
4. Banamex
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