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Microfinance

At Standard Chartered, we believe that our long term financial performance is dependent on the prevailing social and environmental conditions in the markets in which we operate. We also recognise that we are in a position to make a positive social impact in these markets.

A key element of our focus on building a sustainable business is to increase access to those sectors of the population that are either un-banked or under-banked by the mainstream financial sector. Through provision of basic financial services, the population at the bottom of the pyramid has an opportunity to build their lives, fund education and healthcare provision and engage in economic activity, thereby achieving a better quality of life. Our microfinance business allows us to serve this segment and contribute to poverty reduction and economic development in our markets. We provide banking products, services and technical assistance to microfinance institutions which allows them to build capacity and become financially sustainable.

Over the past three years we have provided $540 million of credit and financial instruments to 63 microfinance institutions in the following 14 countries:

  • Bangladesh
  • Uganda
  • Botswana
  • Jordan
  • Zambia
  • China
  • Kenya
  • Sierra Leone
  • Ghana
  • Nepal
  • South Africa
  • India
  • Nigeria
  • Tanzania

We also support microfinance institutions and socially responsible investors in Afghanistan, Gambia, Sri Lanka, Indonesia, Pakistan, Philippines, US and Europe, by providing our transaction banking services and products.

Microfinance benefits the local community in Tanzania

Case Study: Microfinance benefits the local community in Tanzania

Our approach is best demonstrated by the impact that one of our microfinance deals in Tanzania had on the local community.

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Strategy

We adopt a wholesale microfinance approach, providing the full range of banking products and services to microfinance institutions across Asia, Africa and the Middle East, which supports their plans to expand their outreach and impact. We also work with socially responsible investors and facilitate introductions to microfinance institutions.

We invest in technical assistance initiatives, building on our expertise in governance, risk management and human resources, to share best practices with our microfinance partners. We have also supported research and innovation, promoted industry events and, where possible, helped to influence regulatory policy.

Our commitment to microfinance is demonstrated by the growth and expansion of our involvement in the marketplace, despite the prevailing global economic conditions.

Total microfinance funding 2005 2006 2007 2008 2009
Loans extended $24m $70m $170m $385m $540m
Average funding $1m $2m $4m $7m $8m
Number of individuals impacted* 160,000 470,000 1.2m 2.6m 3.6m
Number of microfinance institutions 21 31 45 52 63
*
Based on an assumption of average loan size of $150 in local currency.

Our achievements in 2009

  • $500m commitment completed: At the Clinton Global Initiative in September 2006 we committed to provide $500 million of credit and financial instruments to microfinance institutions in Asia and Africa within five years. By December, we had disbursed a total of $540 million to the sector, two years ahead of our commitment target date of 2011. We have provided finance to 63 microfinance institutions in 14 countries, benefiting approximately 3.6 million people.
  • Capital markets transactions: We have helped microfinance institutions access the capital markets, including two landmark deals in India worth a combined $32 million.
  • Deepening client relationships: We have strengthened and deepened existing relationships in key markets in Asia and Africa and provided additional funding to microfinance institutions in countries such as, India, Bangladesh, and Kenya.
  • Servicing socially responsible investors: We introduced a new relationship model for socially responsible investors in the microfinance sector, including multilaterals, bilaterals, microfinance funds and intermediaries that offered our product and network capabilities and helped the investors to access microfinance institutions in Asia and Africa.
  • Industry recognition: Our Microfinance Institution Loans for Asia and Africa (MILAA), a $93 million risk participation deal, was awarded the Best Structured Finance Deal in Africa by The Banker. Being selected as one of the deals of the year by this highly influential publication is a clear indication of our leading role in the microfinance sector.
Capital markets access for the Microfinance sector

Case Study: Capital markets access for the Microfinance sector

Between April and June, Standard Chartered India completed landmark deals for two of the country's largest microfinance institutions (MFIs)...

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Case Study: Expanding boundaries in the India microfinance sector

As part of our efforts to improve access to finance and reach more of the unbanked, our team in India established a partnership with Maanaveya Holdings & Investments, a subsidiary of Oikocredit.

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Report tools

Annual Report and Accounts 2009