The Co-Operative Bank Creates US$50m Fund for World's Poor

Sep 2007
Manchester, United Kingdom, September, 12 2007 - The Co-operative Bank (LSE:CPBB) has created a special US$50m (GBP25m) fund in order to support the development of small businesses in some of the world's poorest countries.

The Bank has created an innovative line of credit in association with several major international banks that will be used to provide microfinance, or small loans, to the working poor around the world.

The Co-operative Bank is already part of the Global Commercial Microfinance Consortium (GCMC) that brings together institutional investors and development agencies in order to provide finance to poor people and is now looking to build on that commitment with other similar organisations. Microfinance is defined as the provision of financial services to the working poor, usually in the form of small loans that can be as little as US$100, which are provided through Microfinance Institutions (MFI's). MFI's are locally based specialised, formal and semi-formal institutions e.g. commercial banks, co-operative rural banks, credit unions and Non Governmental Organisations (NGOs) who provide financial services to third world micro-enterprises such as small farmers, fishermen, street vendors, cobblers etc. Currently there are over 10,000 MFI's worldwide, providing financial services to 100 million individuals.

Richard Wilcox, Head of Structured and Asset Finance said: "As a member of the GCMC executive board, I have  seen at first hand the valuable role microfinance can play in allowing people to trade their way out of poverty.     "The Co-operative Bank's ethical policy clearly states what we will and will not do with our customers' money whilst it is in the bank. Our involvement in microfinance clearly demonstrates to our customers the mechanics of how our ethical stance really works and shows how their money, when invested with the bank, can make a real difference in tackling global poverty." 

"This structured approach will establish The Co-operative Bank as a credible supporter of microfinance and reinforces our reputation as a leading exponent of corporate responsibility."     Alongside our participation in the GCMC, the bank also recently committed US$2mmillion to the Blue Orchard Loans for Development Fund(i) launched by Morgan Stanley and managed by global microfinance investment manager Blue Orchard Finance SA. The securitised fund comprises loans to 21 Microfinance Institutions in 13 countries in Latin America, Eastern Europe,Asia and Africa and is the first microfinance transaction to receive investment grade rating from a major ratings agency.

Source : Earth Times

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