What is the Citi Foundation's Microfinance End-Game?

Microfinance and economic development go together like monkeys and bananas. Bravo to the Citi Foundation for hopping on the whole micro-lending movement. The Foundation has awarded, spent, or otherwise granted around $8.8 million to foster the growth of microfinance institutions, with a particular focus on India. This is all well and good, but what's Citi's end-game?

It turns out, India's microfinance institution's human resource training was not up to snuff. So, the Foundation partnered with the Grameen Foundation to turn that training around, with the belief that poor training in microfinance institutions were "barriers to the sustainable and responsible growth of the sector."

Citi "invested" $10 million toward the creation and expansion of over 18,000 enterprises around the world and more than $8 million to "build the institutional and management capacity of micro finance institutions." Citi financed a study that concluded in September of 2012 researching, among other things, the impact microfinancing has on economic development. The study was conducted in Madrid, Spain, a region that is currently experiencing the highest unemployment levels in Europe. Unfortunately, the study reveals nothing most people didn't already know. 

For instance, people who don't meet traditional credit or lending criteria need other ways to access capital. The remainder of the report addressed what countries can do to encourage the creation of microfinance banks and individual entrepreneurship among groups that traditionally suffer from high unemployment rates, like college students.

From what I understand, the Citi Foundation did not provide grants for institutions like Grameen to continue doing their good works like providing micro-loans and offering micro-credit lines. Instead, it provided funds to begin a training program that will "serve as an incubator to prove the importance of strategic human capital management and to inform a global implementation strategy." Citi plans to measure the results of this new program and get report back to the world at a later date.

The bottom line is that microfinance and microcredit is extremely important and valuable. Both help build economic security for individuals obtaining micro-loans and definitely works to create jobs. Nonetheless, a global bank that has been plagued with controversies regarding executive bonuses, transparency issues, and accounting irregularities, teaching other banks their standard operating procedures -- well, that just tends to give one pause.