ABN Amro launches microcredit unit

Brazilian bank ABN Amro Real has launched a unit specializing in loans to small formal and informal companies that have trouble accessing traditional financing, the bank announced Monday. The new unit, called Real Microcredito, was created in collaboration with US-based microcredit NGO Accion International. While the project is a vehicle for social good, it is also an additional revenue stream. "Our objective is not to do charity; we want to make Real Microcredito a sustainable company," Banco Real senior VP and microcredit manager Flavio Weizenmann said. The unit will launch in the city of Sao Paulo, where an estimated three million micro entrepreneurs operate. The pilot project will be in Heliopolis, with a branch dedicated to microcredit opening in Ipiranga neighborhood. Loans of 500-10,000 reais (US$160-3,200) will be offered at market rates. The unit has already initiated financing with 15 micro business operators. Accion International was the first company to offer microcredit in Brazil, in Recife city in 1973. The NGO is now responsible for the financing of 600,000 micro companies in Latin America, the Caribbean and Africa. In the 1990s it moved US$3.8bn in financing, with a 99% pay-rate. ABN Amro Real is a subsidiary of Dutch bank ABN Amro.