Access to financial services

Microfinance

Microfinance institutions (MFIs) come in various legal forms and follow a variety of business models having evolved into sophisticated intermediaries providing financial services – credit, savings, insurance and remittances – to the disadvantaged and the unbanked.

At Standard Chartered, we support a range of MFIs enabling us to provide access to finance to those who are not served or are under-served by the mainstream financial sector.

We provide access to finance and banking products, as well as technical assistance, to MFIs in Asia, Africa and the Middle East. We utilise our global network of development organisations, clients, socially responsible investors and sector specialists to increase the flow of funds to the microfinance sector – particularly in Asia and Africa.

At the 2006 Clinton Global Initiative we made an ambitious commitment for our microfinance business.

Clinton Global Initiative Commitment
“The commitment is the establishment of a $500 million microfinance facility [over a five-year period]. Standard Chartered will provide development organisations and fund managers with $500 million of credit and financial instruments as well as technical assistance to finance microfinance institutions (MFIs) in Africa and Asia. It is estimated this facility will benefit four million people who are currently excluded from participation in the financial sector.” Standard Chartered Bank
21 September 2006 at the Clinton Global Initiative, New York
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Our achievements in 2008

  • Provided $385 million of credit and financial instruments since September 2006 to 52 MFI partners in 14 countries, impacting the lives of approximately 2.6 million people
  • Developed relationships with MFIs in new markets such as Jordan, Nigeria, Sierra Leone, the Gambia and China. We also extended support to development organisations and microfinance investors in the Philippines, Indonesia and Sri Lanka
  • Supported new MFI partners in our existing markets, notably India, Bangladesh and Tanzania
  • Deepened relationships with existing clients by meeting their needs for more sophisticated transaction banking, credit and risk management solutions
  • Provided support for core clients in Asia and Africa to access local capital markets. We initiated asset securitisation and local currency bond issues and will complete these in 2009
  • Distributed $125 million of our microfinance portfolio to investors through Microfinance Institutional Loans for Asia and Africa (MILAA). This transaction established a new product to provide investors with access to microfinance in Asia and Africa and will enable Standard Chartered to expand its lending to the microfinance sector
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Microfinance can make a real difference

Microfinance can make a real difference

Clara Ibezim was born into poverty. Her father died young and her mother was disabled. Lacking a sound education and with no family or relatives who could support her, Clara married at 16.

Clara and her family subsisted on her husband’s meagre income. When Nigeria experienced economic recession in the late 1980s, it wasn’t enough to service the family budget. “We could no longer feed them well and my children were not getting the right care and attention,” she says. “They were even driven from school due to delay in the payment of fees.”

Clara’s life changed in 2004, when she was introduced to a credit officer from a Nigeria-based MFI and partner of Standard Chartered, the Lift Above Poverty Organisation (LAPO). With a ₦10,000 ($85) loan from LAPO, Clara has transformed her business and her life.

Clara’s first loan enabled her to stock a small provisions business. Her prompt repayment led to another loan. Early business management training from LAPO had taught her to use the loans for business, rather than personal needs and to reinvest her profits into her business. She has now secured her eighth loan of ₦80,000 ($678). In total, Clara has received ₦360,000 ($3,051) from LAPO to develop her business.

“lt is very encouraging to note that the little business which I started with the sum of ₦10,000 ($85) has grown to a capital base of ₦300,000 ($2,542) within a short time,” she declares. “LAPO has given me support and fresh hope for the future.”

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Expanding microfinance partnerships to the Middle East

Expanding microfinance partnerships to the Middle East

At the end of 2008, we launched our first agreement to fund microfinance projects in the Middle East. Standard Chartered will initially make a JOD1.5 million ($2 million) facility available to Tamweelcom, a Jordanian MFI, to support micro-entrepreneurs and small businesses throughout the Kingdom.

Jordan has huge potential in the microfinance industry. The government’s National Strategy for Microfinance seeks to integrate the sector with the mainstream financial services industry.

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Highlights

  • $385min credit and financial instruments to microfinance institutions
  • 52microfinance partners in our markets
  • 5new markets with microfinance partners