Inner City Press Global Inner Cities Report - November 22, 2004

            The United Nations declared 2005 as the “International Year of Microcredit.”  On November 16, 2004 at Columbia University, the present and future of microcredit was discussed by a five-person panel which included two representatives from the U.N., including UNDCF chief technical advisor Christina Barrineau, and two individuals affiliated with Citigroup. Even beyond these two explicit Citigroup representatives, the U.N. representatives referred repeatedly to Citigroup vice chairman (and ex-IMF official) Stanley Fisher.  Thus it appears to some that, at least for the U.N. and the self-defined elite of the microcredit industry, the world’s largest bank is the leader of banking for the poor. A questioner at the event noted that Citigroup has been charged with predatory lending to the poor, not only by consumer advocates, but by the Federal Reserve Board, the Federal Trade Commission, and other governmental agencies. 

            During the November 16 discussion, Citigroup’s Robert Annibale stated that through time, Citigroup might be the originator or “booker” of the retail loans made by microfinance institutions. He said that Citigroup might sell “micro-insurance” through the microfinance industry’s distributions network, which “digs deeper,” he said, into the target population.

            Mr. Annibale was asked, by Inner City Press' reporter Matthew Lee, to address the incongruity between the activities of CitiFinancial and its predecessors, which have led to governmental charges of predatory lending, and Citigroup’s claimed role in micro-finance.  His response alluded to codes of conduct and legislative change in various countries, but did not address Citigroup’s predatory lending settlements directly.

            A representative from Women’s World Banking, Nancy Barry, did distinguish between loans for small business and loans for television sets and the like (and stated that the latter makes up 90% of the purported micro-finance loans in South Africa).   In a discussion following the panel, one wag speculated that Citigroup might assist microfinance institutions to make loans to prop up Citi’s own “television” and other consumer finance lending.  While microfinance certainly has promise for those in need, its capture by the likes of Citigroup is a potentially troubling development, calling out for greater debate and transparency.

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