MICROCAPITAL BRIEF: Citigroup, Overseas Private Investment Corporation (OPIC) Jointly Loan $10m to Microfinance Institution (MFI) ACBA Credit Agricole Bank of Armenia

Citigroup, a financial services corporation based in the US city of New York, and Overseas Private Investment Corporation (OPIC), a government-backed development finance institution based in Washington DC, recently announced that they will partner to fund two jointly funded loans with a total value of USD 10 million for ACBA Credit Agricole Bank (formerly known as the Agricultural Cooperative Bank of Armenia), a Yerevan-based microfinance institution (MFI) that specializes in the financing of the agriculture sector of Armenia. This credit facility will include a new loan of USD 5 million and the extension of an existing loan of USD 5 million that was disbursed to ACBA in 2012. The aim of the loans is to strengthen ACBA’s microfinance portfolio and to promote financial inclusion in Armenia.

According to a statement attributed to Mr Bob Annibale, the Global Director of Citi Community Development and Microfinance, “expanding access is at the heart of Citi’s inclusive finance work, and we are pleased to continue our impactful partnership with OPIC to broaden financial inclusion, promote economic empowerment and fuel sustainable growth for Armenia’s agribusiness sector”[1]. Ms Elizabeth Littlefield, OPIC’s President and CEO reportedly added that “this new lending facility [is] to spur growth in the Armenian agribusiness sector”[1].

While the details of this arrangement between OPIC and Citigroup have not been released, OPIC has guaranteed funds disbursed by Citigroup for similar purposes in the past.

As of December 2013, ACBA reported total assets of AMD 267.7 billion (USD 656.4 million), total deposits of AMD 107.8 billion (USD 264.5 million) and a gross loan portfolio of AMD 172.6 billion (USD 423.2 million). Since 2006, the French Bank Credit Agricole has held a minority stake in ACBA. As of December 2013, Citigroup reported 200 million customers, total assets of USD 1.88 trillion, total deposits of USD 968 billion, return on assets of 0.73 percent and return on average stakeholder’s equity of 6.9 percent. As of September of the same year, OPIC reported total assets of USD 8.5 billion, net income of USD 162 million, total commitments of USD 3.9 billion and active projects in 102 countries.

By Alíz Crowley, Research Associate

About ACBA Credit Agricole Bank (ACBA)

ACBA Credit Agricole Bank (ADBA) (formerly known as Agricultural Cooperative Bank of Armenia) was founded by the Agricultural Cooperative Regional Unions of the three Armenian provinces of Shirak, Armavir and Ararat and obtained a full banking license on March 29, 1996. ACBA was initially created to finance small and medium-sized agricultural enterprises and individual farmers. In the next few years the bank began to finance non-agricultural activities. In 2006, Credit Agricole SA France made an investment in ACBA and the bank was reorganized into ACBA Credit Agricole Bank closed joint stock company. As of December 31, 2013, ACBA reported total assets of AMD 267.7 billion (USD 656.4 million), total deposits of AMD 107.8 billion (USD 264.5 million) and a gross loan portfolio of AMD 172.6 billion (USD 423.2 million).

About Citigroup

Citigroup is a financial services corporation with its headquarters in the US city of New York. Citigroup offers services including consumer and commercial banking, brokerage, asset management and institutional securities and transactions services in approximately 160 countries. Citigroup’s philanthropic activities are carried out by the Citi Foundation. As of December 2013, Citigroup reported 200 million customers, total assets of USD 1.88 trillion, total deposits of USD 968 billion, return on assets (ROA) of 0.73 percent and return on average stakeholder’s equity of 6.9 percent.

About Overseas Private Investment Corporation (OPIC)

The Overseas Private Investment Corporation (OPIC) is an agency of the US government that was established in 1971 as a development finance institution. OPIC works with private-sector firms in the US to identify opportunities in emerging markets and create an enabling environment for private enterprise in developing countries. OPIC provides financing through direct loans as well as guarantees, political risk insurance and investment funds. As of September 2013, OPIC reported total assets of USD 8.5 billion, net income of USD 162 million, total commitments of USD 3.9 billion and active projects in 102 countries.

Sources and Additional Resources

[1] OPIC Website, Citi, OPIC and ACBA Credit Agricole Bank Support the Growth of the Microfinance Sector in Armenia

MicroCapital, March 31, 2014, Overseas Private Investment Corporation (OPIC), Citi to Share Risk on $550m Global Loan Facility, $220m Inclusive Growth Agreement

MicroCapital, March 21, 2014, Overseas Private Investment Corporation (OPIC) Lends $45m to FINCA Microfinance Holding to Increase Outreach, Range of Services

MicroCapital, December 23, 2013, European Fund for Southeast Europe (EFSE) Loans $3.4m to Agricultural Cooperative Bank of Armenia (ACBA) Leasing in Armenia, Makes $106k Equity Investment in Kreditimi Rural i Kosoves of Kosovo

MicroCapital Universe Profile: ACBA Credit Agricole Bank (ACBA)

MicroCapital Universe Profile: Citigroup

MicroCapital Universe Profile: Overseas Private Investment Corporation (OPIC)

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/

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