MICROCAPITAL STORY: Crédit Agricole Contributes €50m for the Creation of a Non-Profit Foundation in Cooperation with Grameen Bank of Bangladesh

Crédit Agricole, the largest bank in France, announced that it will contribute EUR 50 million towards the establishment of a non-profit foundation in cooperation with Grameen Bank, a Bangladeshi micro-bank. The foundation will finance micro credit providers worldwide through credits, guarantees, and equity capital. In 2009, the foundation will create a fund, open to investors, in order to raise an additional EUR 100 million for operations, according to Crédit Agricole, as reported by Forbes.com.

Founded in 1920, Crédit Agricole and its subsidiaries have a history of participation in microfinance. The bank invested in Banco del Desarrollo in Chile and conducts consulting in Egypt for microfinance institutions (MFIs) across Africa, as reported by MicroCapital. Additionally, the Agricultural Cooperative Bank of Armenia (ACBA), in which Crédit Agricole is the largest shareholder at 28 percent, has concentrated on banking services for low-income entrepreneurs in Armenia’s agriculture sector since 1996, according to the MIX Market. Crédit Agricole’s USD 85 billion of Tier 1 Capital (a measure of a bank’s financial strength) in 2007 was ranked 4th highest in the world, according to The Banker.

Grameen Bank was founded in Bangladesh in 1976 and has 7.4 million borrowers as of January 2008, spanning more than 96 percent of villages across the country. The bank reported total assets of USD 820 million in 2006 and loans of USD 532 million in 2007, according to the MIX Market, the microfinance information clearinghouse. In 2006, Grameen Bank had a debt/equity ratio of 825% and return on assets of 2.44%

By Anthony Busch, Research Assistant

Additional Resources:

The Banker: “Top three shuffle in global listing”, July 2, 2007

BusinessWeek.com Company Profile: Crédit Agricole Group

Crédit Agricole: Home

Forbes.com: “Credit Agricole puts 50 mln eur towards foundation for micro credits”, February 18, 2008

Grameen Bank: Home, MIX Market

MicroCapital article, September 10, 2007: “Bank of Nova Scotia (NovaScotia Bank) Invests USD 810 million on Chilean Bank Banco del Desarrollo”

MicroCapital article, August 31, 2007: “European Bank for Reconstruction and Development (EBRD) and Citigroup Loan USD 16.4 Million to ACBA-Credit Agricole Bank in Armenia”

MicroCapital article, April 4, 2007: “IFC sign partnership with Crédit Agricole in France and Environmental Quality International in Egypt to support financial and microfinance institutions (MFIs) in Africa”