The opportunities microfinance has created in developing countries around the world have not gone unnoticed by Citigroup Inc., who has just launched their Citi Microfinance Donor Fund.
The goal of the charitable fund, according to Kristin McNamara’s The Wall Street Journal article, Citi Fund Backs Entrepreneurs is to prompt the development of microfinance organizations that are too small to cover the cost of their own operations. The fund allows wealthy philanthropists to provide substantial financial support for poor entrepreneurs in the developing world who are unable to get support from banks.
Citigroup has required a minimum donation of $100,000 to their fund, which they hope will allow them to maintain serious donors. Although microfinance donors cannot receive the same recognition available from other charitable giving, they will receive an income tax deduction and will be able to decide where to direct their donations at a later date.
Depending on the success of the Citi Microfinance Donor Fund, Citigroup plans to open a second microfinance fund and other special interest funds.
Microfinancing is yet another way to improve the entrepreneur ecosystem and build a stronger business community.
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