ProCredit strives heavily to be a bank. This is reflected not only on the manner it positions itself to capital investors – a microbank, but also in the image it projects to its customers. They invest in the quality of the client experience through trained personnel and professionally furnished offices. This has been critical to their success as an organization.
Like regular banks, they are interested in credit profiling. However, with the kind of customers it has, hard financial facts are not always available. Thus, as per the Christian Science Monitor article, in the absence of adequate financial information, the personal impression that the loan seeker creates forms part of his/her credit-worthiness profile. Furthermore, if a client has invested time and money into a business, he is more likely to make a greater effort to succeed. So, ProCredit only funds businesses that have been running for at least three months.
ProCredit certainly has the results that show the worthiness of its methodology. As per the Christian Science Monitor article, ProCredit has just 0.7% of non-performing loan investments in its portfolio. And that is lesser than traditional banks. Reuters, while reporting on the recent TIAA-CREF equity purchase in ProCredit said, “at the end of July, the banks had a 1.9 billion euro loan portfolio that was comprised of 670,000 loans, of which 95 percent were 10,000 euro or smaller”.
ProCredit Holding AG is an investment company based in Frankfurt am Main, Germany. It is not a bank itself, but rather the parent company in a group of 19 banks that operate in transition economics and developing countries in Africa, Latin America and Eastern Europe.
Information from the MIX Market is only available on an individual basis per ProCredit Group bank.
-Anirban Gongopadhyay, MicroCapital Writer
Resources
1) Christian Science Monitor: Microcredit finds its European Niche
2) ProCredit: Homepage
3) Microcapital Blog: Global Microfinance Fund responsAbility Buys Equity in ProCredit Holding
4) Microcapital Blog: TIAA-CREF Creates $100 Million Global Microfinance Investment Program (GMIP). GMIP’s first investment to be with ProCredit Holding AG.
