KfW Entwicklungsbank and IFC launch world's largest fund to boost lending to microentrepreneurs in developing and transition countries

Frankfurt (ots) - Refinancing assured for the microfinance sector
Major contribution toward safeguarding and creating jobs in
developing and transition countries

In the presence of German Development Minister Heidemarie
Wieczorek-Zeul and World Bank Group President Robert Zoellick, KfW
Entwicklungsbank and the IFC today launched a cross-border
refinancing facility for microfinance institutions. The fund, created
by KfW Entwicklungsbank with assistance from the IFC, has a target
volume of USD 500 million and aims to support microfinance
institutions (MFIs) by assuring their ability to lend to small and
micro entrepreneurs - even in times of a global financial crisis -
and thus to preserve and create jobs also for poor people. KfW
Entwicklungsbank will provide a promotional loan amounting to USD 130
million and the IFC will contribute USD 150 million. The refinancing
facility is one of several joint efforts by the German Government and
the World Bank Group to mitigate the negative impacts of the global
financial crisis for developing and transition countries.

"Microcredit is one of the most effective development policy
instruments. Microfinance institutions are doing an excellent job all
over the world. We must not allow the global financial and economic
crisis to jeopardise the work of these institutions. We must act now
to ensure that those who are least responsible for the financial
market crisis do not have to bear the brunt of the hardships it is
causing. With the new facility, we are helping to make sure that
people will continue to be able to make use of microfinance services
in their efforts to find ways out of the poverty trap", said
Heidemarie Wieczorek-Zeul, head of the German Federal Ministry for
Economic Cooperation and Development (BMZ) and member of the Board of
Supervisory Directors of KfW Bankengruppe.

"Supporting micro enterprises is highly relevant for development
policy reasons because in developing and transition countries, the
smallest and small businesses act as a motor for growth and for jobs
while also laying the groundwork for safeguarding existing
employment. With this facility we can set a strong example and
quickly counteract the current downward trend in lending to and by
MFIs", explained Dr Norbert Kloppenburg, member of the Managing Board
of KfW Bankengruppe.

Over the coming weeks and months the facility is to be endowed
with additional funds from other public donors, development
financiers and possibly also commercial investors, making it the
world's largest refinancing facility for microfinance institutions.

Robert Zoellick, World Bank Group President since 2007, commented:
"Microfinance plays a critical role in providing financial services
to poor people and fighting poverty. The Microfinance Enhancement
Facility will provide vital funding and ensure that microfinance
continues to stimulate growth, create jobs, and overcome poverty in
emerging markets. I am most appreciative of the German Government's
support, through KfW, for this innovative facility at a time of
economic danger for the developing world".

KfW is one of the largest microfinanciers the world over. On
behalf of the German Government, KfW Entwicklungsbank is now
promoting some 100 microfinance projects in around 60 developing and
transition countries. Its current project portfolio adds up to
approx. EUR 800 million (as of the end of 2007). German Development
Cooperation activities reach out to some 50 million people all over
the globe.

Contact at the BMZ:
Stephan Bethe, tel +49 (0)30/2503-2450,
E-mail: stephan.bethe@bmz.bund.de

Contact at KfW Bankengruppe:
Dr Charis Pöthig, tel +49 (0)69/7431-4683,
E-mail: charis.poethig@kfw.de

Originaltext: KfW
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