MICROCAPITAL BRIEF: United Nations Capital Development Fund (UNCDF) Event Highlights SafeSave’s Asset-Building Microloan Product “P9”

The United Nations Capital Development Fund (UNCDF) recently hosted an event entitled “How Can Microfinance Extend Social Protection in Asian Lesser Developed Countries (LDCs)?”  The P9 program, which was developed by Bangladeshi microbank SafeSave, was highly praised. P9 allows individuals take an interest-free loan of BDT 5,000 (USD 65) that the borrower can pay back on a schedule that he or she chooses. When the loan is taken, half of the amount borrowed is placed into a long-term savings account held in the client’s name. Future loan cycles allow the person to borrow more, with an increasing amount going into the savings account. The borrower can amass more in savings than the amount of the subsequent loan principal within three loan cycles. Clients pay a 3-percent disbursement fee, which results in an effective annual rate of 12 percent if the borrower chooses to repay within six months. SafeSave reports 15,570 depositors with total savings of USD 709,000 and 8,600 borrowers with loans totaling USD 614,000.

About The United Nations Capital Development Fund (UNCDF)
The United Nations Capital Development Fund (UNCDF) is the UN’s capital investment agency for the world’s 48 least developed countries. It endeavors to create opportunities for poor people and their small businesses by increasing access to microfinance and other forms of investment capital. UNCDF focuses on Africa and the poorest countries of Asia, with particular commitment to countries emerging from conflict or crisis. In 2010, UNCDF had a budget of USD 49.4 million.

About SafeSave
Established in 1996, SaveSafe is a Bangladesh-based microfinance organization with a total of June 2011, it had 9 branches and 15,750 depositors. A total of USD 709,000 in savings. The organization’s 8,600 borrowers hold loans totaling USD 614,000. SafeSave’s return on assets is approximately 4.5 percent, and its return on equity is 16 percent.

By Ariana Malushi, Research Associate

Sources and Additional Resources

The UN Capital Development Fund explores link between Microfinance and Social Protection
http://assets.newamerica.net/blogposts/2011/the_un_capital_development_fund_explores_link_between_microfinance_and_social_protect

MicroCapital.org Story, September 22, 2011, “MICROCAPITAL BRIEF: MasterCard Foundation, UN Capital Development Fund (UNCDF) Announce $23m Expansion of MicroLead Program to Promote Savings in Developing Countries”

https://www.microcapital.org/microcapital-brief-mastercard-foundation-un-capital-development-fund-uncdf-announce-23m-expansion-of-microlead-program-to-promote-savings-in-developing-countries/

MicroCapital.org Story, December 15, 2010: “MICROCAPITAL BRIEF: MasterCard Foundation, UN Capital Development Fund (UNCDF) Launch YouthStart to Expand Financial Services for Youth in Sub-Saharan Africa”, https://www.microcapital.org/microcapital-brief-mastercard-foundation-un-capital-development-fund-uncdf-launch-youthstart-to-expand-financial-services-for-youth-in-sub-saharan-africa/

MicroCapital Universe Profile:SafeSave
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SafeSave

MicroCapital Universe Profile: United Nations Capital Development Fund (UNCDF), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=United+Nations+Capital+Development+Fund+%28UNCDF%29

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