MICROCAPITAL BRIEF: Asian Development Bank (ADB) Announces $50m Credit Facility to China Foundation for Poverty Alleviation for Microfinance in Rural PRC

The Asian Development Bank (ADB), a 67-member development finance institution headquartered in the Philippines, recently issued a credit facility of USD 50 million to CFPA Microfinance Management Company Limited, an investment vehicle of the NGO China Foundation for Poverty Alleviation (CFPA), to support rural microfinance in the People’s Republic of China (PRC). CFPA Microfinance will on-lend the money to end-borrowers in areas deemed by the central and local governments as “poverty-stricken.” ADB estimates that the revolving loan, deemed to be of “long tenure”, will provide credit to approximately 130,000 microentrepreneurs through sub-loans totaling USD 200 million. This is ADB’s first non-sovereign microfinance loan in PRC.

As of 2015, CFPA reports to the US-based Microfinance Information Exchange (MIX) assets of USD 403 million and a gross loan portfolio of USD 365 million outstanding to approximately 306,000 borrowers. The organization does not accept deposits. As of 2015, ADB reported total assets of USD 117 billion.

By Michelle Dold, Research Associate

About Asian Development Bank (ADB)

Established in 1966 and headquartered in Manila, the Philippines, the Asian Development Bank (ADB) is a development finance institution that consists of 67 members. ADB has three strategic priorities: to foster inclusive growth, to facilitate regional integration and to ensure environmentally sustainable growth. To accomplish these objectives, ADB uses loans, technical assistance programs, grants, equity investments and guarantees in member countries in the region. As of 2015, ADB reported total assets of USD 117 billion.

About China Foundation for Poverty Alleviation (CFPA)

Established in 1989, the China Foundation for Poverty Alleviation (CFPA) is a non-governmental organization (NGO) that began to provide microfinance services in 1996 through a poverty alleviation project funded by the World Bank. As of 2016, CFPA serves 100,000 clients annually and operates in 53 branches across 17 Chinese provinces. As of 2015, CFPA reports to the US-based Microfinance Information Exchange (MIX) assets of USD 403 million and a gross loan portfolio of USD 365 million outstanding to approximately 306,000 borrowers. As of 2014, CFPA reports return on assets of 1.04 percent and return on equity of 3.48 percent. The organization does not accept deposits.

CFPA Microfinance Management Company Limited, a microfinance investment vehicle of CFPA, provides microloans and non-financial services such as enterprise training to low-income people. Through this vehicle, CFPA “endeavors to spin-off and transform [its] microfinance operations into a commercially operated entity.”

Sources and Additional Information:

[1] ADB: “ADB, CFPA Sign $50 Million to Boost Support for Microfinance in PRC

[2] MicroCapital Universe Profile: Asian Development Bank (ADB)

[3] MicroCapital Universe Profile: China Foundation for Poverty Alleviation (CFPA)

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