Citi has said that its partnership with ACCION Texas, a nonprofit microfinance institution, has made an impact at the one-year mark despite the economic downturn and weak small business sector performance. Citi’s partnership with ACCION Texas generated $6m in loans to help finance small business investments in underserved communities, which allows ACCION Texas to further expand its business model.
In August 2008, Citi entered into a five year contract with ACCION Texas to purchase up to $30m in microenterprise loans, marking a first for the US microfinance industry. As part of the agreement, ACCION Texas is serving as Citi’s national service provider, handling underwriting, servicing and collections. In addition, both Citi and ACCION Texas are sharing the risks and the revenue from the loan portfolio.
Robert Annibale, global director of microfinance at Citi, said: “Citi’s unique business partnership with ACCION Texas brings together the market and lending expertise of this leading US microfinance institution and Citi’s Commercial Bank in Texas to serve and provide finance to microentrepreneurs. We are very pleased that our partnership with ACCION Texas, which has a solid track record of serving small enterprises, will contribute to greater scale and finance for emerging businesses.”
Janie Barrera, president and CEO of ACCION Texas, said: “After more than 15 years in the microfinance business, ACCION Texas is achieving consistent growth and strong performance and with our partners have succeeded in developing a scalable credit and operating platform. Through our partnership with Citi, we are increasingly able to serve more clients.
“With high unemployment and tightening credit, the value of microfinancing multiplies. ACCION Texas’s partnership with Citi has guaranteed our ability to provide more loans to new and existing self-employed business owners and, given its success, we are actively evaluating how to expand the partnership.”
