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How It Operates
How the UK Fund OperatesMicrocredit brings the power of credit to the grassroots via loans to the poor, without the requirements of collateral or previous credit experience, and is proving to be a revolutionary force in enabling families to rise from poverty. The DB Fund makes subordinated, low interest loans to microfinance institutions (MFIs) with maturities of three to eight years. Loans received by the MFIs from the DB Fund are used as collateral to leverage capital from local commercial financial organisations normally at a 2:1 ratio, for direct lending to the poor. There is no collateral requirement on the final borrower. Loans from the DB Fund cannot be used as working capital by the MFIs or as funds for direct lending to programme participants. Experience gained over 5 years by the DB US Fund suggests that the beneficiaries of loans are good credit risks and that our loans enable MFIs to grow to scale and reach self sufficiency by assessing sustainable sources of local commercial capital. How can I Donate?In the UK, Deutsche Bank has established an independent charity to enable staff and clients to support the microcredit industry - in an efficient and effective way. The Deutsche Bank Microcredit Development Fund was registered in 2002 and 100% of the money donated is loaned to MFIs. Deutsche Bank covers all administration and management costs; therefore you know that all of your financial contribution is used in helping to reduce poverty. As DB Microcredit Development Fund is a registered charity, it can reclaim the tax on donations of any amount made by individuals, whether regular or one-off. For further information on donations, please contact Kate Cavelle. |
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