Citigroup Grants $1 Million for Low-Income Loans in Asia

Business Wire, March 24, 1999

NEW YORK--(BUSINESS WIRE)--March 24, 1999--A $1-million grant from Citigroup Foundation will give thousands of low-income entrepreneurs in Asia access to vital "micro-loans," some amounting to as little as $50, to start small businesses.

The grant to the Grameen Foundation USA will enable Grameen, which is based in Bangladesh, to extend its successful global "micro-credit" program to five countries hit hard by the Asian financial crisis: Indonesia, Malaysia, the Philippines, South Korea and Thailand.

The grant, which was announced today, will allow people who are unlikely to qualify for commercial-bank loans to borrow at or near commercial-bank rates to establish or expand "micro-businesses." These loans, whose recipients are mostly women, typically support small-scale businesses ranging from the production of food and textiles, such as rice husking and weaving, in rural areas to taxi services, cleaning, gardening and day care in cities.

"This grant is an important step forward in our effort to provide 100 million of the world's low-income families with the means to support themselves by 2005," said S.M. Huzzatul Islam Latifee, managing director of Grameen's trust.

"We focus on education and community development in all of Citigroup's markets worldwide," said Paul Ostergard, chairman and chief executive officer of the Citigroup Foundation. "In Asia, our community-development initiatives are often centered around microlending as a way to both strengthen communities and help people move up the economic ladder. Ultimately, we hope to see the most successful borrowers become Citigroup customers as their businesses prosper. It makes sense for us to use our business skills as a way to help build communities."

Grameen, which means "village" in Bengali, will use the Citigroup funds to provide seed capital for new micro-credit programs, raise the capitalization of existing programs, supply technical assistance to the programs receiving funds, and provide scholarships for training in the Grameen methodology.

Since the program began in 1976 with establishment of the Grameen Bank in Bangladesh, Grameen has lent an average of $160 to nearly 3 million people in 29 countries. Its loans to date total $2.5 billion, with many borrowers returning for larger loans after they have established an initial credit history. The loan repayment rate is more than 97 percent.

Citigroup Inc., which was formed on Oct. 8, 1998 by the merger of Citicorp and Travelers Group, provides a broad array of financial products and services to 100 million consumer and corporate customers through its operations in 100 countries. Among its businesses are Citibank, Commercial Credit, Primerica, Salomon Smith Barney, SSB Citi Asset Management, Travelers Life & Annuity and Travelers Property Casualty.