Grameen Capital is a collaboration between Grameen Foundation, IFMR Trust and Citicorp Finance India Limited, to enable Microfinance Institutions (MFIs) to develop wider access to the capital markets, primarily the domestic capital markets, through
• Securitization and syndication of microfinance loans and other innovative debt and equity solutions
• Proactive engagement with rating agencies and potential investors
• Arranging credit enhancement where necessary
• Capital advisory services to MFIs for raising low-cost on-lending funds
India is a country where demand for microfinance among the poor far exceeds supply. Fewer than 10 percent, of the 75 million households that could benefit, have access. One of the greatest barriers is the industry's lack of capital. GCI will implement innovative financing structures enabling Microfinance Finance Institutions (MFIs) and livelihood finance providers access this much-needed capital.
Prof Muhammad Yunus, the renowned Nobel laureate, in his latest book "Creating a World Without Poverty" shares his next big idea - social businesses. Referring to Grameen Capital India as a unique 'social business', he writes "The fact is that there is plenty of money in any country to lend money to the poor. It is all a question of mobilizing it and making it available to the poor. Grameen Capital India will facilitate access to local capital markets for Indian MFIs."
Present on the occasion of the launch of Grameen Capital India were Mr. Alex Counts, President, Grameen Foundation, USA, Ms. Bindu Ananth, President, IFMR Trust, Mr. Sanjay Nayar, CEO, Citi India & Area Head - Bangladesh, Nepal & Srilanka, Mr. Nachiket Mor, President, ICICI Foundation, Mr. Robert Eichfeld, former head of Citibank's South Asia and Middle East region & Grameen Foundation Board Member, Mr. James Greenberg, Chairman of DevCorp International & Grameen Foundation Board Member as well as Chairman of the GCI Board and Mr. Royston Braganza, CEO of the newly formed Grameen Capital India.
Said Mr. Alex Counts, President, Grameen Foundation, "Grameen Capital India will be a strong vehicle for providing India's rapidly maturing microfinance sector with the sophisticated financing structures it needs for continued growth and success. We are pleased to join forces with IFMR Trust and Citicorp Finance in creating this unique financing intermediary in one of the most important microfinance markets and under Royston Braganza's leadership, we hope GCI will become a model for the broader industry."
Ms. Bindu Ananth, President, IFMR Trust, said, "IFMR Trust's focus is to invest in commercial enterprises that leverage the competitive strengths of low income households especially those that are living in remote rural locations of India. We believe that Grameen Capital India's innovative financing structures will allow Microfinance Institutions (MFI's) to access available, untapped capital and grow themselves to cater to this large segment of the population. We are delighted that with our strong partners in Grameen Foundation and CFIL, Grameen Capital India has been formed to serve the growing need of this sector."
Mr. Sanjay Nayar, CEO, Citi India, said, "Grameen Capital India Pvt. Ltd. will enable breaking through the capital constraint barrier that has prevented the sector from growing as quickly as it is otherwise capable of. At Citi, we have always been committed to developing innovative and inclusive financial solutions and are delighted to be partnering another path-breaking effort."
Mr. Royston Braganza, CEO, GCI, said, "Scalability and sustainability are critical for microfinance to achieve its potential in India. For this both the availability and the cost of funds are key concerns. GCI, through innovative product structuring and capital markets engagement, seeks to address these aspects, enabling MFIs to sustainably scale-up."
Dr. Nachiket Mor, President, ICICI Foundation, said, "It is estimated that 600 million people in India do not have access to financial services. To serve this segment, among other things, the microfinance industry requires wider access to capital markets. By catalysing the growth of organizations such as GCI, the ICICI Foundation for Inclusive Growth expects that this capital will work to increase the growth and reach of microfinance and in turn the incomes of low income households in a sustainable manner."
About Grameen Foundation:
Grameen Foundation is a global non-profit organization that combines microfinance, technology, and innovation to empower the world's poorest people to escape poverty. It has established a global network of partners in 25 countries that has impacted an estimated 20 million lives in Asia, Africa, the Americas, and the Middle East. Based in Washington, D.C., Grameen Foundation was founded by Alex Counts, who began his work in microfinance with 2006 Nobel Peace Laureate Dr. Muhammad Yunus, the founder of Grameen Bank. Dr. Yunus is a founding and current member of Grameen Foundation's board of directors.
For more information on Grameen Foundation, please visit www.grameenfoundation.org
About IFMR Trust:
IFMR Trust creates and manages funds which invest in commercial enterprises that leverage the competitive strengths of low income households especially those that are living in remote rural locations of India.
The IFMR Trust through its first private equity fund (the Network Enterprises Fund) will build channels which deliver financial and other services in these areas and invest in a series of Network of Enterprises™, that invest across the supply chain in multiple sectors. The current portfolio of investments includes financial services companies in handicraft, consumer products, drinking water, education and vocational training.
IFMR Trust brings to this effort expertise in the design and delivery of financial services, a deep understanding of mainstream markets, practical insights gained from action-research undertaken by its affiliate - The Institute for Financial Management and Research (IFMR) and partnerships with large companies and NGOs; all in the context of remote rural India.
About CFIL:
Citicorp Finance (India) Limited (CFIL) is a 100% subsidiary of Citibank Overseas Investment Corporation ('COIC'), a Citigroup subsidiary. It was incorporated in India on July 2, 1997 with the objective of offering wide range of financial services to customers. CFIL is also registered with Reserve Bank of India as a Loan and Investment Non Banking Financial Company and offers diversified financial products including loans, hire purchase, leasing, investment and research analytics to its customers.
Over the last ten years it has grown from strength to strength with an unbroken track record of profitability. As at the March 31 2007, its balance sheet size was in excess of Rs. 55 billion with owned funds of Rs 11.7 billion.
Contact:
Royston Braganza, CEO,
Grameen Capital India Ltd.
Tel: +91 98210 69693
Email: royston.braganza@grameencapital.in
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