SKS Microfinance and Citibank today announced a $40 Million (Rs.180 crores) groundbreaking financing program involving Citibank India purchasing loans that are originated by SKS. Representing Citibank�s increased foray into rural microfinance, the program will deliver income-generating loans of between $120 (Rs.5,000) to $485 (Rs.20,000) to a population of over 200,000 unbanked customers spread across 7000 villages in 11 States of the country by financial year 2007-08. The partnership combines SKS� robust customer acquisition and management model with Citi�s extensive experience in financial structuring for microfinance institutions, networks and investors in emerging markets to fulfill a shared objective of greater financial inclusion and poverty alleviation through commercially viable and sustainable lending programs.

The highlight of the Citi-SKS agreement is in the fact that each individual loan originated by SKS is purchased by Citibank which shares credit risk in the transaction. Grameen Foundation (GF), as part of its global USD 50 million Growth Guarantees program launched in late 2005, will provide a limited guarantee to SKS and be an integral element of the innovative risk-sharing structure. This global guarantee program recognizes and responds to the needs of growing microfinance institutions in India, such as SKS, and encourages sector participants to expand their portfolio and presence through expanded access to local banking finance.
Vikram Akula, Founder and CEO of SKS, said, �We are pleased to partner with Citibank in this ground-breaking initiative to bring greater financial inclusion to India�s poor. The partnership will enable us to provide increased economic opportunity to hundreds of thousands of poor families across the country and move us closer to our goal of scaling to 5 million families by 2010.�
The Citi-SKS program encompasses 49 rural branches of SKS in the states of Andhra Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Orissa, Jharkhand, Uttar Pradesh, Bihar, Rajasthan, Chattisgarh and West Bengal. Under the partnership, the origination and servicing of loans will rest with SKS. SKS utilizes a five-member group methodology, in which this group serves as the ultimate guarantor for each of its members. As additional groups are formed within a single village, a �center� emerges which is composed of up to 10 groups or 50 members. Center members also provide social collateral, and are responsible for repayments if one member is unable to pay an installment. SKS currently has approximately 650,000 clients, a portfolio of $65 Million (Rs.301 crores), and has so far disbursed $170 Million (Rs.770 crores) in 304 microfinance branches in the states of Andhra Pradesh, Karnataka, Maharashtra, Orissa and Madhya Pradesh, Bihar, UP, Rajasthan, West Bengal, Jharkhand, and Chhattisgarh.
Speaking on the occasion, Robert Annibale, Citi's Global Director of Microfinance, said, �SKS has demonstrated that providing financial services to rural communities and microentrepreneurs in India can be achieved on a sustainable and scalable basis. This innovative financing structure provides risk participation and funding diversification that will support SKS�s significant growth plans.�

Alok Prasad, Citi India�s business manager of the Bank�s microfinance group, added, �As a prominent corporate citizen, we are committed to the country�s larger developmental goals through financial inclusion. Through this partnership, we strengthen our vision of providing financial products and services to unbanked and underserved segments with special financial needs such as marginalized women and in making a positive impact on human development indices.�

"Grameen Foundation�s Growth Guarantee program is central to our vision of expanding financial services to poor families by strengthening the relationships between microfinance organizations and their local financial sector, and we are pleased to join with SKS and Citibank in supporting this innovative transaction,� said Alex Counts, president of Grameen Foundation. SKS has been a Grameen Foundation partner since 2002.

About Citi�s Microfinance Group
The Citibank Microfinance Group works with Micro Finance Institutions (MFIs) as partners and clients to expand access to financial services and products to the �unbanked� in urban and rural areas who are not currently reached by the formal banking sector. The focus of the business group is to increase MFI access to capital, develop capacities, and support the microfinance sector as a whole. In addition to credit products, the Group offers innovative savings facilities for first-time savers, including access to biometric ATMs.

About SKS
Launched in 1998, SKS Microfinance is one of the fastest growing microfinance organizations in the world with a growth rate of 170% and 60,000 new customers per month. Recognized for its use of a for-profit methodology, and application of business best practices and technology to scale and reduce costs, SKS has provided over $170 Million (Rs. 770 crores) in income-generating loans to 650,000 women clients in 11 states of India. SKS also offers life insurance to 1.3 million customers and has recently piloted health insurance for the poor and urban microfinance for India�s thousands of slum-dwellers. Its NGO affiliate, SKS Ultra Poor Program, is one of the first programs in the country focused on bringing ultra poor populations into the realm of mainstream microfinance.

About Grameen Foundation
Grameen Foundation is a global non-profit organization that combines microfinance, technology, and innovation to empower the world's poorest people to escape poverty. It has established a global network of partners in 23 countries that has impacted an estimated 16 million lives in Asia, Africa, the Americas, and the Middle East. Grameen Foundation was founded by Alex Counts, who began his work in microfinance with Grameen Bank founder, and 2006 Nobel Peace Prize Laureate, Dr. Muhammad Yunus. Dr. Yunus is a founding and current member of Grameen Foundation�s board of directors. For more information on Grameen Foundation, please visit www.grameenfoundation.org.

Citi
Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi�s major brand names include Citibank, CitiFinancial, Primerica, Citi Smith Barney and Banamex. Additional information may be found at www.citi.com.