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Financial Times By Peter Thal Larsen in London
Published: February 19 2008 02:00 | Last updated: February 19 2008 02:00
Credit Agricole is to join forces with Grameen Bank, the pioneering provider of microfinance, to support fledgling microlenders around the world.
The French banking group yesterday said it would inject €50m ($73m) to endow a fooundation which will work with Grameen to provide financial guarantees and expertise to help launch microfinance institutions.
The decision signals the growing attraction of microfinance - making tiny loans to very poor savers, often in developing countries - pioneered by Muhammad Yunus, Grameen's Nobel-winning founder.
The creation of the foundation, to be called the Grameen-Credit Agricole Microfinance Foundation, marks one of the first times a large financial institution has formally linked with Grameen, which has been operating for 30 years.
The move will allow Grameen to extend its operations by supporting other microlenders around the world.
Though there are an estimated 10,000 microlenders, many struggle to establish and sustain their operations due to a shortage of wholesale financing and a lack of expertise in managing such institutions.
The foundation is expected to offer financial guarantees, equity investments, training and technological expertise to microlenders.
It may also devote some of its resources to funding so-called social enterprises, which seek to maximise social returns rather than profits.
Georges Pauget, chief executive of Credit Agricole, said the bank had been attracted to the project through its own roots as a lender to farmers in 19th century France.
"We have some experience in microlending, but we want to extend it . . . it's necessary to dedicate capital and very special teams."
The creation of the foundation comes after Mr Pauget last year travelled to Bangladesh to meet with Mr Yunus and visit Grameen's operations in the country.
Grameen has been expanding its operations in other countries, including the United States. It recently started offering microlending to poor immigrants in the New York suburb of Queens.
"Microcredits are an effective weapon against poverty because they make everyone, even the poorest of the poor, the master of his own destiny by giving him the means to develop his own project," Mr Yunus said.
The venture, which will be based in Luxembourg and is expected to employ initially about 15 people, is due to be up and running later this year. |
