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Jorge Rubio, Global Head of Citi Social Finance. Photo courtesy of Citi |
What is social finance?
My journey into social finance began in the early 2000s, when I was working as a corporate banker. A trip to southern Mexico changed my perspective. There, I saw how group lending and microfinance were transforming indigenous communities, particularly by providing women with their first access to working capital loans. These women used the funds to grow their businesses and consistently repaid their loans, which resulted in strong portfolio quality.
This experience solidified my commitment to development finance. Citi’s unmatched global reach has allowed me to extend these transformative experiences worldwide. In 2005, Citi launched its microfinance team to support underserved communities in over 40 countries. Our initial efforts focused on assisting microfinance institutions that needed capital in local currencies—a critical need that our global presence helped address.
What is the role of Citi’s Social Finance unit?
Three years ago, we renamed the unit Citi Social Finance to reflect our expanded focus on a broader range of social issues. This includes financing solutions that address financial inclusion and provide access to basic services like connectivity, water and sanitation, education, healthcare, and food security.
Over two billion people around the world lack access to basic necessities—clean water, education, electricity, financial products, housing, and healthcare—which severely limits their economic opportunities and social mobility. As the world’s leading global bank, Citi aims to drive positive social impact and create financial innovations that foster sustainable economic growth for underserved communities worldwide.
With more than half of our global presence in over 40 emerging markets, our team works alongside Citi’s local operations to connect these regions to international markets, mobilizing both public and private capital for socially impactful companies, often in local currencies.
In 2022 alone, our team helped mobilize around $3 billion, including contributions from other financial institutions and external investors. These funds supported clients aiming to achieve high social impact. Our projects span a range of sectors, from water and sanitation in marginalized communities in Brazil, to school building in Peru, to fintech solutions for women-led SMEs in Mexico, affordable housing in Indonesia, microfinance for women in India and the Philippines, and solar electricity for rural communities in Kenya.
What are some trends in the global social finance landscape?
There’s been a noticeable shift in the types of investors interested in social finance. In the past, development finance institutions (DFIs) were our primary partners in sharing risks and originating large-scale transactions. Today, impact investors, traditional asset managers, and Citi’s institutional clients are increasingly viewing social finance as a legitimate asset class that can deliver both financial returns and substantial social impact.
Technology is also playing a key role in expanding opportunities for social finance. It is making access to the internet, digital payments, and essential services more direct, accessible, scalable, and commercially viable.
For example, in Kenya, Citi helped close a securitization deal in May with Sun King, a company that finances home solar systems. The company uses a pay-as-you-go model, where customers make small, regular payments to access electricity. This model not only enables children to study at night but also allows small business owners to extend their hours of operation, increasing their income.
What initiatives has Citi undertaken in Vietnam?
In 2022, Citi Social Finance mobilized over $3 billion globally, with more than $600 million allocated to Asia. In Vietnam, we facilitated a carbon reduction project involving cookstoves and water purifiers, in partnership with several organizations. This deal was a landmark for Citi in the field of carbon offsets and credits.
Looking ahead to 2024, Citi Commercial Bank Vietnam continues to support sustainable development through several key initiatives that align with global ESG best practices. In collaboration with Citi India and the Social Finance team, Citi Vietnam provided a $10 million working capital social finance facility and a $10 million term loan to a coffee producer focused on economic inclusion. This producer works directly with coffee farmers to source beans and provides advisory services to help improve their production.
Additionally, Citi Vietnam is providing a $30 million working capital facility to a company in the Mekong Delta region that focuses on accessible, affordable, and quality healthcare. We also approved a $10 million local green trade facility for a prominent Vietnamese company dedicated to sustainable paper manufacturing.
We anticipate that increased private capital investment, combined with innovative and disruptive business models, will expand access to basic services and create a more equitable global landscape.
