Press Release

Friday, September 22, 2006

OPIC Board Approves $70 Million for Global Microfinance Program

WASHINGTON, D.C. – The Overseas Private Investment Corporation (OPIC) and Citigroup Corporate and Investment Banking are spearheading a $100 million loan program that will help capitalize hundreds of microfinance institutions around the world, the two organizations announced today.

The board of directors of (OPIC) approved a $70 million guarantee enabling Citigroup to launch a new microfinance term local currency lending program designed to fund microfinance institutions (MFIs) in Africa, Asia, Central and Eastern Europe, and Latin America, particularly smaller MFIs that have not traditionally received funding. Among its developmental benefits, the program will facilitate a greater scale of microfinance lending by Citigroup.

OPIC’s risk participation will support an initial Citigroup microfinance financing program totaling $100 million. Working from a preliminary list of participating MFIs comprising 132 institutions in 39 countries, Citigroup and its affiliates will originate, fund and extend medium term loans ranging up to $5 million.

To date, a majority of MFI funding has been highly concentrated: as of mid-2004, 89 percent of foreign investment had gone to only 148 MFIs, 87 percent of which were in Latin America and Central and Eastern Europe. The World Bank estimates that as of December 2004 the global supply of microfinance was approximately $12 billion, while demand was $300 billion.

“This microcredit finance program will help to diversify support for MFIs, raising the profile of the microfinance sector among mainstream investors in regions that have not yet realized their benefit,” OPIC President and CEO Robert Mosbacher, Jr. said. “Moreover, it will introduce sophisticated financing techniques to smaller MFIs, enabling them to grow more quickly.”

“Ultimately, the program will provide much-needed capital to MFIs in the developing world, which in turn will positively impact the income and quality of life for micro-entrepreneurs. OPIC is pleased to work with Citigroup on a project with so many developmental benefits,” Mosbacher said.

“Citigroup will leverage its global franchise and businesses to extend needed funding and establish banking relationships with a wide range of MFIs, including non-profit institutions, cooperatives, banks and other financial entities, in partnership with OPIC,“ according to Bob Annibale, Citigroup’s Global Director of Microfinance.