ABN AMRO accelerates growth in Micro Financing

ABN AMRO announces today in its Sustainability Report that it autonomously almost doubled its number of microfinance clients. With an increase from 186,300 clients in 2005 to 351,500 last year ABN AMRO has enlarged its footprint in this important division of sustainable banking. Other achievements are an increase in community investment, in socio-environmental financing and in sustainable procurement.

ABN AMRO further maintained its leading position in the listing of Carbon and Clean Energy Businesses on the London Equity Markets and in the trade of allowances under the EU Emissions Trading Scheme and carbon credits under the Kyoto Protocol.

Microfinance enables many people to work their way out of poverty. However, a significant challenge remains extending the reach and distribution capacity of microfinance activities. ABN AMRO's local operations drive microfinance forward. In the USA, Brazil and India, the three countries where we currently have microfinance activities, we use different models customised to local needs and commercial operations.

In Brazil, we have expanded our loan portfolio from EUR 0.2 mln in 2005 to some EUR 5.8 mln in 2006. This means it has evolved from a pilot to a sizeable operation in nine cities across Brazil. Half of our customers in Brazil are under age 30, while 62% of all customers are women. Personal and group loans account respectively for about 80% and 20% of the loans. The repeat customer rate remains at 60%. For the coming years, our strategy is to expand into low-income areas that offer productive activities. By the end of 2006, 78 microcredit agents were working out of 14 service facilities.

In India we apply a different model. Here we provide specialised financial intermediaries with credit who then lend the money to economically disadvantaged borrowers. This approach combines the bank's financial strength with the vast rural network of the intermediaries. In 2006 our Indian microfinance portfolio had grown to EUR 26.2 million through partnerships with 26 intermediaries across six states. Our Indian microfinance business achieved break-even within one year of start-up and continues to operate profitably.