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Grameen Foundation Announces a $1 Million Landmark Financing for Nigerian MFI LAPO

Submitted by: Grameen Foundation USA

Categories: Finance, Socially Responsible Investing

Posted: May 07, 2007 – 11:15 AM EST

 

First Growth Guarantees Transaction in Sub-Saharan Africa

May 07 /CSRwire/ - WASHINGTON, D.C. / LAGOS, NIGERIA - May 7, 2007- Grameen Foundation has announced its first Growth Guarantee transaction in Sub-Saharan Africa: US$1 million for Lift Above Poverty Organization (LAPO), a leading microfinance institution (MFI) in Nigeria. Citibank, acting through its subsidiary in the country, The Nigeria International Bank (NIB), structured the US$1mm Naira equivalent loan supported by a US$500,000 guarantee from Grameen Foundation. This marks the first transaction between a Nigerian MFI and NIB/Citibank, and it is also LAPO’s first leveraged commercial bank transaction.

This financing will support LAPO’s aggressive expansion plans to serve an increasing number of customers in Nigeria that currently lack access to formal financial products and services. It will also allow LAPO to tap new sources of funding, previously only available from donors or subsidized loans.

"LAPO has made tremendous strides over the past few years to become a key player in Nigeria's microfinance industry, and we are pleased to support their continued growth," said Alex Counts, President and CEO of Grameen Foundation. "There are an estimated 40 million Nigerians who could benefit from microfinance, and we hope this watershed transaction will encourage greater support for microfinance from Nigeria’s commercial institutions." LAPO has been a Grameen Foundation partner since 2002, growing from 15,000 clients to its current outreach of 90,000. It intends to reach more than 225,000 clients by 2008.

In Nigeria, more than 70 million people live in poverty. But in the 935 communities in the 8 states served by LAPO there is hope for progress. "This wonderful partnership with Grameen Foundation and Citigroup will certainly expand and strengthen LAPO’s outreach significantly, which means better businesses and better living for our clients," said Godwin Ehigiamusoe, LAPO’s founder and executive director.

"We believe that microfinance is a key weapon in reversing sub-Saharan Africa’s growing poverty rates," said John Doerr, a Grameen Foundation board member and ardent Africa champion. "Attracting commercial funding will help LAPO and other MFIs expand their operations and open new doors for them."

This structure is in line with Citi's global objective to support the development of microfinance. Emeka Emuwa, Citi's Country Manager said, "This transaction diversifies commercial funding sources available to LAPO and also supports the Government of Nigeria's objectives of building more inclusive financial systems."

About Grameen Foundation

Grameen Foundation is a global non-profit organization that combines microfinance, technology, and innovation to empower the world's poorest people to escape poverty. It has established a global network of partners in 23 countries that has impacted an estimated 16 million lives in Asia, Africa, the Americas, and the Middle East. Grameen Foundation was founded by Alex Counts, who began his work in microfinance with Grameen Bank founder, and recent Nobel Peace Prize recipient, Dr. Muhammad Yunus. Dr. Yunus is a founding and current member of Grameen Foundation’s board of directors. For more information on Grameen Foundation, please visit www.grameenfoundation.org.

About LAPO

Founded in 1987 in Benin City, Nigeria, Lift Above Poverty Organization (LAPO) provides affordable financial services to rural and urban poor communities. It offers a wide range of savings and loan products to its clients including regular (working capital) loans, farming loans, regular and voluntary savings. LAPO has been awarded the CGAP Pro-Innovation Challenge award for its innovative "Credit for Shares" loan product which aimed at encouraging the participation of the poor, specifically women in the privatization programs of the Nigerian government. In 2006, LAPO also received the Grameen Foundation "Excellence in Microfinance Award."

About Citi

Citi, the leading global financial services company has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Additional information may be found at www.citi.com.

For more information, please contact:

Liselle Yorke Grameen Foundation
Phone: 202-628-3560, ext. 128

 

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