Posted on December 8, 2009 - by James

Citi and ACCION Texas Report Significant Progress Helping Microentrepreneurs Through Economic Downturn

Citi today announced that its partnership with ACCION Texas has made a significant impact at the one-year mark despite the economic downturn and weak small business sector performance. Citi’s partnership with ACCION Texas generated $6 million in loans to help finance small business investments in underserved communities, which allows ACCION Texas to further expand its business model.

Established in 1994, ACCION Texas is a nonprofit microfinance institution that provides credit to low- to moderate-income entrepreneurs who do not have access to traditional sources of credit, and helps these entrepreneurs to stabilize and increase their incomes, create employment opportunities, and contribute to the economic revitalization of their communities. ACCION Texas has the largest active microloan portfolio in the U.S., and has served over 10,000 clients with loans totaling more than $89 million, with an average loan size of $15,000.

In August 2008, Citi entered into a five year contract with ACCION Texas to purchase up to $30 million in microenterprise loans, marking a first for the U.S. 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.

“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,” said Robert Annibale, Citi’s Global Director of Microfinance. “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.”

The partnership was developed jointly by Citi Microfinance and Citi Commercial Banking. Today, Citi works with 100 microfinance institutions (MFIs) in over 40 countries.

By partnering with microfinance leaders such as ACCION Texas, Citi Microfinance and Citi businesses are developing profitable and sustainable models combining our respective strengths and resources to reach underserved communities and to serve more small business clients.

ACCION Texas President and CEO Janie Barrera 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.” Barrera noted her organization was fortunate to have access, through Citi, to additional capital beyond what is typically available in nonprofit funding through grants or loans.

“With high unemployment and tightening credit, the value of microfinancing multiplies,” said Barrera. “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.”

The Citi Foundation has provided more than $1 million in capacity building philanthropic support to ACCION Texas over the past 13 years. Citi’s partnership with ACCION Texas builds on nearly three decades of experience in the area of microfinance through Citi Foundation and Citi’s formal launch of Citi Global Microfinance as a business unit in 2005.

Note to editors:

About Citi

Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 140 countries. Through Citicorp and Citi Holdings, Citi provides 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.citigroup.com or www.citi.com.

Citi Microfinance

Working across Citi’s businesses, product groups and geographies, Citi Microfinance serves more than 100 microfinance institutions (MFIs), networks and investors as clients in over 40 countries with products and services spanning the financial spectrum – from financing, access to capital markets, transaction services and hedging foreign exchange risk, to credit, savings, remittances and insurance products – to expand access to financial services for the underserved.

ACCION Texas

ACCION Texas (www.acciontexas.org) is a private non-profit 501 (c)(3) microenterprise development organization based in San Antonio with 14 offices across Texas and Louisiana. The organization began lending in 1994 and developed and implemented a recognized blueprint for establishing microlending programs in new areas around the state. In December 2007, ACCION Texas received the Wachovia Next Award after being selected over 600 other Community Development Financial Institutions (CDFI) with less than $50 million in assets. The same year, it began providing underwriting and loan services to other microlending institutions nationwide. In 2008, the organization signed a five-year agreement with Citi to purchase up to $30 million of ACCION Texas’s microloans. Currently, ACCION Texas has $6 million loans under management for Citi.