Asian Development Bank invests $32M in CreditAccess Asia to boost financial inclusion
The Asian Development Bank finalized a $32 million equity investment in CreditAccess Asia this week as part of a joint effort to expand financial inclusion in underserved markets throughout the region.
CreditAccess Asia (CAA), an Amsterdam-based company operating microfinance institutions in nearly 650 locations throughout South and Southeast Asia, currently offers loans and other financial products to around 1.8 million customers – over 99 percent of whom are women.
The ADB investment will enable CAA to increase operational support for its subsidiary microlenders as they provide funding for emerging local businesses. The deal also includes a $500,000 technical assistance grant to bolster CAA’s internal capacity.
Overall, ADB expects that the partnership will help extend financial services to 3.5 million women in Asia over the next four years.
“ADB fully supports our mission to become a leading provider of financial products for micro and small businesses in India and Southeast Asia,” said Paolo Brichetti, Chief Executive Officer of CAA. “Given the critical institutional role of ADB in the region and its experience in supporting financial services across Asia, we are confident to have established the right partnership to accomplish our plans and to meet our customers’ needs.”
Limited financial access is a persistent problem for development in Asia, where traditional banking and credit infrastructure remains weak. In the Philippines for example, where both ADB and CAA have offices, less than a third of the population has a bank account, including only 15 percent of the country’s poorest citizens. The World Bank estimates that for 375 million people in the developing world, inability to prove legal identity is the primary obstacle to financial inclusion.