First loan facility by an international bank to a microfinance institution in China
Source: Standard Chartered.
Original press release available here.
BEIJING, January 18 – Standard Chartered Bank (China) Limited (Standard Chartered) today signed loan and co-operation agreements with China Foundation for Poverty Alleviation (CFPA) in the Great Hall of the People, witnessed by Premier Wen Jiabao of the People’s Republic of China and British Prime Minister Gordon Brown. This is the first time an international bank will provide credit loan facilities to an organisation dedicated to microfinance projects in China.
According to the agreement, Standard Chartered will provide the initial amount of RMB 20 million (USD 2.8 million) as credit loan facility to CFPA, who will finance the microfinance projects aiming to provide financial support to farmers and owners of micro-enterprises in ten counties of seven provinces in China, most of which are nationally designated as “poor counties” by the Government.
Standard Chartered and CFPA will also establish a strategic partnership to cooperate on best practices sharing and technical issues. Under this agreement, Standard Chartered will bring to CFPA its global expertise in wholesale rural finance, while CFPA will share its domestic retail microfinance execution experience to assist Standard Chartered in launching rural finance related business in China.
Katherine Tsang, CEO and Executive Director of Standard Chartered, said, “We are most delighted to work with CFPA. Standard Chartered supports the Chinese government’s policy of expediting the reform of rural financial system, and is committed to actively involve in Microfinance projects. We believe our joint efforts will help enhance productivity, increase income levels and improve living standards of farmers; while supporting the government in alleviating poverty in the rural areas at the same time.”
Duan Yingbi, Chairman of China Foundation for Poverty Alleviation, said, “Our cooperation with Standard Chartered, on one hand, relieves CFPA’s loan fund shortage, expands our project scale, and helps more of the poor to increase their income. On the other hand, CFPA can learn from Standard Chartered about their international financial management knowledge, experience as well as best practices. In this way, CFPA can also improve on our microfinance management in terms of proficiency and efficiency, thus promoting a more sustainable development of our microfinance program and helping more of the poor in China.”
Peter Sands, Group Chief Executive of Standard Chartered PLC, said, “This initiative is part of Standard Chartered’s commitment at the second Clinton Global Initiative to establish USD 500 million microfinance facility across our markets by 2011, which is estimated to benefit 4 million people currently excluded from participation in the financial sector. Standard Chartered now provides microfinance facilities to 13 countries in Asia and Africa, and by bringing our experience into China we endeavour to significantly contribute to the financial services industry in China’s rural areas.”
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