MICROCAPITAL BRIEF: ADB Lending $20m in Local Currency to MicroCred to Support MSMEs in Western China

The Asian Development Bank (ADB) recently agreed to loan the equivalent of USD 20 million to MicroCred China, a unit of the France-based Baobab Group, to support micro-, small and medium-sized enterprises (MSMEs). The money is intended to support rural entrepreneurs in western China in growing their businesses and generating jobs.

MicroCred China was founded in 2007 and is based in Hong Kong. Its 2017 gross revenue totaled EUR 27 million (USD 31 million). The institution does not accept deposits.

As of 2017, the Baobab Group, formerly known as MicroCred Group, focuses on providing digital financial services to MSMEs in Africa and China. These services include loans, savings accounts, insurance, and tools for accessing clean energy and water. In 2017, it reported total assets of EUR 635 million (USD 726 million), a gross loan portfolio of EUR 600 million (USD 686 million), customer deposits of EUR 194 million (USD 222 million) and 704,000 clients served in 11 countries.

The goal of ADB, which was established in 1966, is to eradicate poverty in the Asia-Pacific region. It is owned by 67 countries, of which 48 are located in the region. For 2017, the ADB had a total budget of USD 32.2 billion, including USD 11.9 billion in co-financing.

By Michelle Fleming, Research Associate

Sources and Additional Resources

ADB press release
https://www.adb.org/news/adb-signs-deal-microcred-china-improve-access-finance-msmes-western-prc

ADB homepage
https://www.adb.org

Baobab/ MicroCred China homepage
https://baobab.bz

Baobab Group financial information
https://baobab.bz/rapports/RA_BGP_EN_2018_BD.pdf

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