Deutsche Bank is committed to launching the Million Global Microfinance Consortium as a demonstration of a new model of corporate social engagement. We will continue to work towards the deployment of our financial capabilities, along side our expansive network of relationships, to create additional collaborative models to attract new capital to the creation of sustainable models of financing positive social change.
The goal of Global Microfinance Consortium is to arrange a million fund to provide financing for MFIs throughout the developing world while developing a new asset class in which responsible corporations may invest that earns a return while realizing significant social gains for the world's poor. The structure of the Consortium relies on development agencies to minimize risk for commercial investors as a means to leverage expanded capital flow, to help meet global challenges, beyond what finite philanthropic resources and development agency budgets can accomplish. This strategy of innovative financial structuring leverages off of Deutsche Bank's capabilities as one of the world's largest financial services firms with a long standing commitment to active social responsibility efforts.
Deutsche Bank has been active in supporting microfinance activities, throughout the developing world for the past seven years. Small loans to micro-entrepreneurs have proven successful in lifting entire families out of poverty, breaking cycles of dependency and transforming entire communities. The Bank's commitment over the past seven years has been to support the goals of Microfinance Institutions (MFIs) to reach scale and economic self-sufficiency through access to conventional sources of capital. Through the existing Deutsche Bank Microcredit Development Fund, guarantees have been provided to 40 MFIs in 28 countries including Uganda, Pakistan, Mexico, Russia, The Philippines and India. These financings have resulted in more than million in capital availability in loans for the poor.
While DB MDF (which has been capitalized through charitable donations from Deutsche Bank and wealthy clients) has been a great success, there is the opportunity to demonstrate that a broader group of investors can be attracted to the microfinance sector and earn a financial return for their participation. Many MFIs are commercially viable and enjoy impressively low default rates (often below 1% and the overwhelming majority below 5%). Deutsche Bank is committed to attracting commercial investors to the microfinance sector as a means to expand the capital availability to MFIs while demonstrating a new model of financing social change.