The Co-operative Bank has teamed up with several large international banks to establish a $50 million (£25 million) fund that will be used to support small businesses in developing countries.
The bank is already part of the Global Commercial Microfinance Consortium (GCMC), which helps unite investors and development agencies in order to offer finance to the world’s poorest people. The Co-operative Bank is now looking to expand on its financial aid endeavours through alliances with other organisations.
The new fund will offer microfinance to promote company development in small third-world firms.
Head of structured and asset finance, Richard Wilcox, said: “As a member of the GCMC executive board, I’ve seen at first hand the valuable role microfinance can play in allowing people to trade their way out of poverty.”
Microfinance is a way of providing financial services to the working poor. This usually takes the form of small loans – sometimes from as little as $100 – that are provided through Microfinance Institutions (MFIs). MFIs are locally based institutions such as commercial banks, co-operative rural banks, credit unions and Non Governmental Organisations (NGOs).
“Our involvement in microfinance clearly demonstrates to our customers the mechanics of how our ethical stance really works and shows how their money, when invested with the bank, can make a real difference in tackling global poverty,” said Mr Wilcox.
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