ACCION® International, a pioneer and leader in global microfinance, announced today that Brazilian President Luiz Inácio Lula da Silva has approved its application to establish ACCION Microfinanças, a new microfinance organization in the state of Amazonas in Brazil's remote northern region. It was in Recife, Brazil that ACCION first pioneered the concept of microlending, in 1973.

Joining ACCION as an equity partner in the new venture is the Multilateral Investment Fund (MIF) of the Inter-American Development bank (IDB), which will assume an 18.1 percent stake. Private investor Luiz Felipe D'Avila and other private investors will assume a total of 8.5 percent. ACCION will hold 73.4 percent of the organization.

ACCION Microfinanças will begin operations in Manaus, the largest city in Amazonas, with plans to extend services to cities throughout Brazil's northern region. The northern region, comprising seven states with a total population of about 14.7 million, is home to an estimated 1.9 million microentrepreneurs, only 8 to 10 percent of whom have received any kind of loan from a bank or microfinance organization.

"We are particularly excited by the prospect of extending financial access in Amazonas, one of the most underserved regions of a country where microfinance, overall, remains nascent," said Michael Schlein, President and CEO of ACCION. "This underscores our commitment to deliver such services to some of the developing world’s most needy regions, and follows closely on the announcement of our investment in Saija Finance, a microfinance startup in Bihar, India."

ACCION Microfinanças plans to apply new approaches and innovations in microfinance to best serve the needs of Amazonas microentrepreneurs. These include employing a credit scoring and a cash flow-based credit assessment model; making use of Brazil's innovative correspondent banking system to partner with banks and extend services through retail stores and other outlets; and deploying payment technologies such as PDAs, prepaid bank cards and cell phones.

In addition to conventional working capital loans, ACCION Microfinanças envisions diversifying its product offering over several years to include products such as lines of credit, credit cards, longer-term fixed-asset loans, financial education and, eventually, microinsurance products through alliances with insurance companies.

"ACCION's new operations in Amazonas will be serve as an incubator for new approaches to credit underwriting, create new partnerships that extend access to services, develop innovative technologies, and diversify financial product offerings," said Tomas Miller, senior investment officer at the IDB's Multilateral Investment Fund. "The MIF is proud to be a partner in this new venture."

Private investor Luiz Felipe D'Avila added, "Stimulating entrepreneurship through microfinance is one of the most efficient ways to help people out of poverty."

ACCION will provide intensive management support in the initial years of ACCION Microfinanças's operation, deploying ACCION staff in key management positions as part of a plan to develop local capacity for long-term management of the institution.

About ACCION

ACCION International is a private, nonprofit organization with the mission of giving people the financial tools they need - microenterprise loans, business training and other financial services - to work their way out of poverty. A world pioneer in microfinance, ACCION was founded in 1961 and issued its first microloan in 1973 in Brazil. ACCION's partner microfinance institutions today are providing loans as low as $50 to poor men and women entrepreneurs in 23 countries in Latin America, Asia, Africa and the United States. In the last decade alone, ACCION partners have disbursed more than 28.5 million loans totaling $23.4 billion; 97 percent of the loans have been repaid.

ACCION&reg is a registered trademark of ACCION International.

ACCION International

ACCION International

ACCION International is a private, nonprofit organization with the mission of giving people the financial tools they need―microenterprise loans, business training and other financial services―to work their way out of poverty. A world pioneer in microfinance, ACCION was founded in 1961 and issued its first microloan in 1973 in Brazil. ACCION International's partner microfinance institutions today are providing loans as low as $100 to poor men and women entrepreneurs in 25 countries in Latin America, Asia, Africa and the United States. In the last decade alone, ACCION partners have disbursed more than 17.9 million loans totaling more than $12.3 billion; 97 percent of the loans have been repaid. Selected for the fourth consecutive year for its pioneering approaches to poverty alleviation, ACCION was among 43 organizations awarded the 2007 Social Capitalist Award by Fast Company magazine. ACCION has also been awarded Charity Navigator's highest rating―four stars―for efficiency and sound fiscal management. For more information, visit www.accion.org.

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