USAID Joins with Grameen Foundation to Launch Largest Guarantee in Program's History
FOR IMMEDIATE RELEASE
October 21, 2009
Press Office: 202-712-4320
Public Information: 202-712-4810
www.usaid.gov
WASHINGTON, DC - The U.S. Agency for International Development (USAID) and Grameen Foundation today announced a new collaboration that will make up to $162.5 million in local currency financing available to microfinance institutions (MFIs) throughout the developing world. The twelve-year program is the largest credit guarantee to date under USAID's Development Credit Authority and also marks the first time that a non-governmental organization has been approved to serve as facilitator. Grameen Foundation will manage the credit risk of the pool and vet the microfinance institutions who would like to access the funding, while both organizations will issue joint guarantees together.
More than 150 million people around the world rely on microfinance, which makes financial services available to the poor for income-generating activities. The current financial crisis, however, has made it increasingly difficult for MFIs to access the funding they need. Equally important, less than 30 percent of all international funding to MFIs is in local currency, which exposes them to foreign exchange risk if the value of their local currency falls, as happened during the financial crisis. This alliance between USAID and Grameen Foundation offers a wider range of financing options to more MFIs in their local currencies from local commercial banks. An estimated 600,000 poor borrowers and their families could benefit from this partnership, ultimately impacting over three million lives.
"We at USAID are proud of our thirty year commitment to microfinance, a commitment that we renew today," said USAID's Acting Administrator Alonzo Fulgham. "Increasing access to finance enables the world's poor to improve their own lives, and this partnership will enable thousands more to lift themselves out of poverty."
Grameen Foundation's CEO Alex Counts said "We are extremely pleased to join USAID in opening up new financing opportunities to microfinance institutions that will enable them to expand and serve more poor people. Grameen Foundation has been a strong advocate for providing funding to these institutions in their local currencies so that they are better insulated from global financial shocks and can also build important relationships within their local financial markets."
For more information about USAID, visit www.usaid.gov.
For more information about Grameen Foundation, visit http://www.grameenfoundation.org.
The American people, through the U.S. Agency for International Development, have provided economic and humanitarian assistance worldwide for nearly 50 years.
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