Washington, D.C. (PRWEB) September 20, 2005
President Bill Clinton has cited Grameen Foundation USA's (GFUSA) new global program that will make as much as $50 million available in credit guarantees to poverty-focused microfinance institutions that provide tiny loans to help poor people to start, sustain or grow very small, self-sustaining businesses.
The GFUSA Growth Guarantees program, developed with Citigroup, was unveiled at the inaugural meeting of the Clinton Global Initiative in New York. GFUSA Board Chair Susan M. Davis; Vinod Khosla, one of the donor-guarantors, and Partner, Kleiner Perkins Caufield & Byers; and Bob Annibale, Global Director of Citigroup's Microfinance Group, joined President Clinton on stage to make the formal announcement.
GFUSA has secured commitments for more than half of the program's $50 million target. The first closing is near and GFUSA seeks to reach its target within the next 12 months. The anticipated $50 million program could guarantee up to US$300 million in local currency financing for poor people around the world.
"Microfinance is an immediate and proven solution to reduce poverty on a global scale," said Alex Counts, president of Grameen Foundation USA and a participant at the historic three-day conference. "The GFUSA Growth Guarantees program will enable microfinance lenders to assist larger numbers of impoverished people who are determined to lift themselves from poverty by starting or expanding businesses of their own. This ground-breaking program is a pragmatic social and economic investment for the future of our planet because it will help thousands of people escape poverty."
"President Clinton's participation in the announcement of the GFUSA Growth Guarantees Program further demonstrates the value and potential of this new approach to reducing global poverty," said Davis. "Globally, the need for microfinance services greatly outstrips the actual supply, and as of 2004, less than a quarter of the demand was being met. GFUSA's Growth Guarantees Program is an excellent example of the financial innovations needed to bridge this gap."
The GFUSA Growth Guarantees program is designed to respond with flexibility to the ever-changing global financial service landscape and the needs of growing microfinance institutions. It will offer a wide range of financing options, including direct lending, bonds and securitizations. The financing options will be customized, by country, to meet local financial regulations.
GFUSA Growth Guarantees will be privately funded in a manner that will pave the way for more private capital to join the movement against global poverty. Bob Annibale, Global Director of Citigroup's Microfinance Group, said: "This program structure is unique because individual donor guarantors don't give their money, but rather offer their credit to establish a pool of guarantees in the form of Standby-Letters of Credit (SBLCs), which support the anticipated $50 million program. Donor guarantors will continue to hold their assets and realize returns on their portfolio while microfinance institutions gain access to increased financial resources." In coordination with GFUSA, Citigroup will facilitate the issuance of the guarantees.
About Grameen Foundation USA
Grameen Foundation USA (GFUSA) is a global non-profit organization that combines microfinance, technology, and innovation to empower the world's poorest people to escape poverty. Founded in 1997, GFUSA has established a global network of 50+ partners in 22 countries that has impacted an estimated 5.5 million lives in Asia, Africa, the Americas, and the Middle East.
The Foundation sprang from the Grameen Bank of Bangladesh. Grameen Bank was started in 1976 by an economics professor, Dr. Muhammad Yunus, who was convinced that women could break through poverty by taking tiny loans to start or expand tiny businesses. Today, Grameen Bank serves nearly 5 million borrowers, with 10,000 families escaping poverty every month. As strategic global partners, GFUSA and Grameen Bank share a common vision, knowledge and success models to accelerate the microfinance industry's impact on the world's poorest people. Dr. Yunus, the founder and director of Grameen Bank, is a founding and current board member of GFUSA. For more information on Grameen Foundation USA, please visit http://www.gfusa.org.
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