Behind Credit Suisse’s foray into microlending to the global poor
Monday, August 28, 2017
If you haven’t thought about it in a while, the word “microfinance” might evoke an image of a circle of women sitting under a mango tree.
In its early days, Grameen Bank put microfinance on the map by making tiny loans to communities of female small-business owners who put social pressure on one another to repay the loans.
Microfinance has come a long way since then. Today, data-enabled microloans are made to small-business owners, farmers and consumers all over the world, often through smartphones and loan officers wielding iPads. Artificial intelligence is used in credit scoring and credit decisions as well as fraud detection.
And the loans are profitable. So much so that Credit Suisse has built a business around letting its private banking and private equity fund clients invest in microfinance loans, and the returns are competitive. To keep the supply of those loans going, the bank’s philanthropic arm gives financial aid to microfinance institutions and bank employees help them solve management and technology problems.
Photo credit: Mags’ pics for everyone
Source: American Banker (link opens in a new window)
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