Citi steps up microlending

MANILA, Philippines - While most banks across Asia seem to be focusing on the high-networth market in Asia, some are also concentrating on the promising mass market. Most view licenses in China as an opportunity to capitalize on the so-called China Dream; others see microfinance as a means to build long-standing relationships across the region.

According to the India Development Foundation, nearly nine million Indian households that had access to microfinance moved above the $1.25 a day consumption threshold between 1990 and 2010, indicating that microfinance might be helping.

Last week, Citi announced two programs designed to help promote financial inclusion in Asia and push people above the poverty line.

One scheme involves new funding for the Banking With The Poor Network (BWTP), a pan-Asia microfinance network.

Citi Foundation, which targets its strategic giving to focus areas such as microfinance, enterprise development and asset building, said it was giving grants worth $200,000 to support BWTP members from 12 countries across the region.

This is in addition to more than $2 million in support Citi Foundation has provided to BWTP thus far.

Citi Foundation said that it would make a $1-million commitment to partner with Habitat for Humanity in launching a three-year multi-country micro-savings and financial education initiative.

The program will target communities living in substandard housing in the Philippines, Thailand and Vietnam that are regularly exposed to natural disasters such as flooding and typhoons.

It helps 3,000 low-income homeowners strengthen their homes against disasters, by providing savings products, financial education and technical construction assistance.

“There are an increasing number of natural disasters in this region, and although Citi has a proud history of disaster response, we also understand the importance of disaster risk reduction,” said Shirish Apte, CEO, Citi Asia-Pacific.

“At Citi, our goal is to increase the supply of financial products and services that improve and accelerate the financial inclusion of low-income individuals,” said Pamela Flaherty, Citi Foundation president and CEO.

Citi and the Citi Foundation have supported Habitat for Humanity since 1999, providing a total of $32 million to advance Habitat’s mission of providing affordable homes for low-income families.

In the Asia-Pacific region, after the Indian Ocean tsunami, Citi worked with Habitat for Humanity on disaster rebuilding projects in Indonesia and Sri Lanka.

Other current Citi-funded programs include an annual home build in South Korea that incorporates a financial education component; and a recently-launched financial education program for low-income homeowners in Malaysia.