Unitus Teams Up With OPIC & Citi to Make $15 Million Available for the Developme...

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Mar 2010
Seattle, United States of America, March, 29 2010 - In their ongoing effort to empower the world's poor through microfinance, international nonprofit Unitus, Inc., the Overseas Private Investment Corporation (OPIC), and Citi have finalized a $15 million credit facility that will help foster growth among high-potential microfinance institutions (MFIs) and create more opportunities for families working their way out of poverty.

The agreement will match the strong partner relationships and expert due diligence capabilities of Unitus with the capital and credit approval capacity of OPIC. When enabled by Citi's global banking network, the facility will deliver much needed financial resources to microfinance institutions serving underserved communities worldwide.

"There is a lot of money going into what could be termed Tier I MFIs -- those already possessing a level of scale and track record that make it relatively easy to attract commercial equity and debt. This deal targets smaller, younger Tier II and III MFIs providing similar microfinance services while in far more complicated fundraising positions," said Richard Wardell, Unitus's VP of Global Programs. "Our hope is that this work will catalyze the growth of another generation of Tier I MFIs, thus creating more opportunities for more families to improve their lives."

The eight-year revolving debt and guarantee facility will see Unitus and OPIC sharing the risk on a series of transactions supporting high-potential MFIs. The deal limits the amount any single MFI can receive to $2 million, and loans to start-up and early stage MFIs in aggregate cannot exceed $12 million. With a presence in over 100 countries, Citi's global network will provide local currency lending to minimize foreign exchange risk for these MFIs.

Dr. Lawrence Spinelli, Acting President of OPIC, said, "Projects such as this -- empowering smaller MFIs during a time when capital available to them is scarce -- are critical to the ongoing success of microfinance. OPIC is pleased to work with Unitus and Citi to strengthen the MFI network globally so that microentrepeneurs can, in turn, generate economic growth in their local communities."

While OPIC has been working to support microfinance for many years -- including its recently announced $250 million Global Microfinance Program with Citi -- this is its first catalytic debt facility targeting early stage MFIs.

"Citi is pleased to be able to expand its long term partnership with OPIC and Unitus to extend local currency financing to emerging MFIs, supporting micro-entrepreneurship and stimulating economic growth," said Bob Annibale, Global Director Citi Microfinance. Citi's US Commercial Bank has developed expertise in serving the microfinance industry through the structuring of innovative financial products and services.

"In a very practical way, this facility will allow us to amplify the impact of the resources already at our disposal," commented Wardell. "The confidence OPIC is showing in us reinforces what our supporters already know -- that Unitus is committed to doing the greatest amount of good for the greatest number of families in need."



Source : Market Watch
 

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