$250 million MFI fund launched by ADB

via CAAI

Tuesday, 14 December 2010 15:00 Catherine James

THE Asian Development Bank has launched a US$250 million microfinance fund to support private sector institutions which lend to the poor.

ADB said in a statement yesterday it would use the “large scale” fund “to partner with financial institutions that actively lend to microfinance institutions in the ADB’s developing member countries”.

Peter Brimble, ADB Cambodia senior country economist, told The Post the outcome for Cambodia was yet to be determined.

“We’re exploring the relevance of this to Cambodia,” he said, adding that he was enthusiastic about the move.

“This is a sector we want to work on, so we’re excited to hear about a regional fund that allows us to explore the possibility of more Cambodia-specific projects,” he said.

The ADB’s statement said it would support the expansion of lending to MFIs by sharing up to 50 percent of the default risk on underlying MFI loans, “in turn enabling increased provision of financial services to the under served”.

“This will help address the significant unmet demand from the poor for financial services, and provide additional funding for micro-borrowers,” it said.