Beijing, August 27, 2012
- IFC, a member of the World Bank Group, has agreed to provide a 315 million Chinese yuan (or $50 million) loan to Fullerton Credit to expand its microfinance lending for small and medium enterprise in China’s less-developed western and central provinces.
With this loan, Fullerton Credit is expected to extend over 2 billion Chinese yuan worth of loans in China’s Sichuan, Chongqing, and Hubei provinces over the next few years.
Fullerton Credit is a subsidiary of Fullerton Financial Holdings, which is wholly owned by the Singaporean government’s investment arm Temasek Holdings. As of June 2012, Fullerton Credit had established 24 branches in China with 580 staff in total.
“The partnership between IFC and Fullerton is a significant step forward,” said Danny Quah, CEO of Fullerton Credit. “With IFC as a strong strategic partner, we will be able to further improve our operations and hence scale up the support to the lower income segment of the market.”
”IFC is keen to support the development of China’s microfinance sector through innovation and with strong partners like Fullerton,” said Serge Devieux, IFC’s Asia Director for Financial Markets. “Going forward, we will continue exploring novel business models to stimulate the healthy development of the microfinance sector.”
In China, IFC has been supporting the burgeoning microfinance sector through direct investment and technical advice. As one of China’s largest microfinance investor, IFC has an existing portfolio of more than $20 million in around 10 projects. Since 2004, IFC has helped create the first foreign-invested microcredit company and supported the largest grassroots microfinance institution in China in expanding access to credit to the rural poor.
The Fullerton loan will be funded through IFC’s new Renminbi Swap Facility. IFC is the first multilateral institution authorized to conduct transactions with Chinese banks in the domestic currency swap market. By providing loans in local Chinese currency, IFC is able to meet the particular financing needs of its private sector clients and help them avoid foreign exchange risks.
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