International Finance Corporation (IFC) of the World Bank Group Uses USD 2.5m to Promote Microfinance in China
International Finance Corporation (IFC) of the World Bank Group Uses USD 2.5m to Promote Microfinance in China
Microfinance in China continues to gain international recognition as the IFC signed an agreement to loan Zhong An Credit USD 2.5 million to bolster their range of services in China. Zhong An Credit is a Caymen Islands holding Company with microlending operations in China that provides small unsecured loans to entrepreneurs and small businesses. This cash infusion will enable Zhong An credit to extend their lending services while also providing needed capital for their overhead operations. The IFC provides capital and consulting services to quality microfinance institutions around the world in an attempt to grow them quickly to expand their impact on the local communities.
This sizable loan signals the IFC’s approval of Zhong An Credit’s current work and Mamta Shah, IFC Director for Global Financial Markets, Asia, Europe, Middle East and North Africa, has said, “This agreement with Zhong An Credit is a first step in what we expect to be a long-term relationship. It is also a first step in IFC’s efforts to build a presence in the country’s microfinance sector.”
Currently Zhong An Credit has 21 branches in Shenzhen and a branch in Hebei Province. With increased funding and support from the IFC they are seeking to open more branches in Shenzhen and other parts of the country. Discussions with the relevant authorities are ongoing and they hope to expand their impact shortly. The IFC is also aware of the impact their support of Zhong An Credit will have on the credibility of Microcredit’s ability to be sustainable in China. Richard Ranken, IFC Director for East Asia and Pacific, said, “We are very pleased to partner with Zhong An Credit in our efforts to provide more funding opportunities to local small businesses that are underserved by the traditional banking sector. Building viable microfinance institutions is a vital part of IFC’s strategy in China, especially in poor and rural areas. This project will have a strong demonstration effect and show that microfinance lending is commercially viable.”
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment. Through their in-country advisory group, Private Enterprise Partnership for China (PEP-China), located in Chengdu, Sichuan province they identify organizations with technically sound businss models that have good prospects of being profitable. The recipients must also support activities that benefit the local economy and satisfy social and environmental regulations of the IFC and the host country. The IFC’s mission is to help poor people have the opportunity to escape poverty and improve their lives. In FY07, IFC committed USD 8.2 billion and mobilized an additional USD 3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries.
Original press release available here.
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