ABN Amro, currently in merger talks with British banking major Barclays, has doubled its micro finance clientele globally with its India portfolio in the segment growing to 26.2 million Euro in 2006.
The growth in the bank's Indian micro finance portfolio came through partnerships with 26 intermediaries across six states and the business achieved break-even within one year of start-up and continues to operate profitably, ABN Amro said in a statement.
The bank said in its sustainability report that the number of its micro finance clients has almost doubled to 351,500 last year from 186,300 clients in 2005.
"In India, we apply a different model as we provide specialised financial intermediaries with credit who then lend the money to economically disadvantaged borrowers. This approach combines the bank's financial strength with the vast rural network of the intermediaries, " it said.
Micro finance are small loans that enable many people (entrepreneurs) to work their way out of poverty. However, a significant challenge remains extending the reach and distribution capacity of micro finance activities.
In addition to India, the bank also provides micro finance in USA and Brazil.
"In Brazil, we have expanded our loan portfolio from 0.2 million Euro in 2005 to some 5.8 million Euro in 2006. This means it has evolved from a pilot to a sizable operation in nine cities across Brazil," it said.
In the USA, ABN Amro also works with intermediaries to support start-up and micro businesses. Because of the nature of the US economy, developing a small business to move someone out of poverty requires larger provisions.
