Inclusive Finance in India: Citi Partnering with CreditAccess Grameen to Finance 75,000 Women Entrepreneurs

September 05, 2019
Raj Chakraborty, Director Citi Inclusive Finance India
Kyla Gineitis, Vice President, Citi Inclusive Finance
Karthik R S, Citi Financial Institutions India

Roughly 1.7 billion adults globally do not have an account with a financial institution, nearly half of whom live in just seven countries. Of these, the second largest group of "unbanked" people are in India, according to the World Bank, where 190 million people are operating primarily in cash and are excluded from the financial mainstream and vital pathways to increase their financial opportunity. Women in India make up 60 percent – 114 million – of India's unbanked population. This number is more than the total population of the United Kingdom and Spain combined.

At Citi, we are not always able to reach "the last mile" in serving individuals, enterprises and communities, and we know that no single company, industry or government agency can reach such a huge underserved population on its own. It takes leadership, investment, innovation, and above all, supporting key clients with business models that support financial inclusion.

That recognition underpins our collaboration with long-time microfinance client, CreditAccess Grameen. This spring, Citi India funded 2 billion INR (the equivalent of $29.5 million USD) to CreditAccess Grameen, the largest microfinance institution in the country.

The funding, structured with a risk participation by the Asian Development Bank, will allow CreditAccess Grameen to reach an additional 75,000 women with an average loan size of $390 USD. One hundred percent of CreditAccess Grameen's borrowers are women, with 80% of its client base residing in rural, hard-to-reach locations.

We began working with CreditAccess Grameen eleven years ago when the institution's balance sheet reached only 100,000 borrowers with $20 million of capital. Today, the publicly listed microfinance powerhouse has expanded to a lending base of over $1 billion, supporting over 2.6 million women in mostly rural areas of the country with access to the funding to support their families and themselves.

"CreditAccess Grameen recognizes the importance of multi-level institutional engagements to address the gap in financial inclusion; in this regard, our collaboration with Citi has been a significant one. Our long-standing relationship with Citi also helped us to ensure better ALM (Asset Liability Management)," said Mr. Udaya Kumar Hebbar, Managing Director and CEO of CreditAccess Grameen. "The latest funding support from Citi will help us reach more underserved/unserved households. We are honoured to have Citi as one of our institutional partners."

Aligned with the Government of India's National Financial Inclusion Strategy, Citi India and Citi Inclusive Finance are working with the Export Finance Agency group (colleagues who specialize in risk sharing development finance) to provide core financing to microfinance and corporate clients. We also often work with international development institutions, which in turn provide funding to micro-entrepreneurs, women, rural small farmers and others who have the least access to formal financing.

Financial inclusion is core to the work that Citi does with clients such as CreditAccess Grameen. The bank is enabling our clients to expand their businesses, while delivering vital opportunities that meet the unique needs of the "last mile" and drive inclusive economic growth of the communities they serve.

Our partnership with CreditAccess Grameen exemplifies Citi's global commitment to supporting often marginalized communities, helping them to gain access to the financial services and funding required to grow their businesses. It also aligns with Citi's broader mission of empowering women globally as business leaders, internally and as clients.

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