Unitus to administer $15M loan fund for developing nations
Written on March 30, 2010
Seattle-based nonprofit Unitus will administer a new $15 million revolving loan fund that will help mid-sized microfinance institutions acquire capital to expand their operations and serve more borrowers in developing nations.
The fund, which will provide loans and loan guarantees to microfinance institutions in countries such as India and Mexico, will have an eight-year life and is being created with funding from the Overseas Private Investment Corporation (OPIC) and Citigroup Inc. (NYSE: C). Unitus will provide some funding as well.
The goal of the fund is to provide capital to mid-tier microfinance institutions — lenders that may have between 25,000 and a few hundred thousand borrowers, but are not among top-tier lenders that often have more than 1 million borrowers.
“We think Unitus is an outstanding organization when it comes to helping small and emerging microfinance institutions reach scale,” said Loren Rodwin, senior manager of micro and small and medium-size enterprises finance at OPIC online pay day loans. OPIC is a government agency that helps U.S. companies invest overseas and fosters economic development abroad.
Unitus will identify microfinance institutions that qualify for the fund and will approve loans in coordination with Citi and OPIC.
Under the agreement, OPIC and Unitus will share the fund’s risk for loan defaults. OPIC will provide the vast majority of the capital for the fund and Citi will use its network of offices to distribute loans in local currencies.
Unitus, which has offices in India and Kenya, is focused on helping microfinance institutions — organizations that provide financial services to the poor including loans, savings accounts and insurance — expand and reach more borrowers.
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