American International Group Inc. said it has acquired an 18 percent interest in MicroCred Nanchong, China (MNC) and the exclusive right to sell micro insurance to MNC clients for two years.
MNC is the first wholly foreign-owned micro credit company in China, the company said. It added that in addition to AIG, MNC is jointly owned by the International Finance Corporation, KfW Bankengruppe and MicroCred S.A.
AIG Micro Financial Services will spearhead AIG's involvement with MNC.
AIG's micro insurance programs provide life and property insurance to micro loan clients to cover their net worth or the principal of the loan. Micro loans provide capital to impoverished people in developing countries for small enterprise businesses.
MNC began operations in October of 2007. It currently offers its clients a micro loan product with an average loan size of Chinese yuan RMB 25,000 (approximately U.S. $3,600).
The company said it plans to introduce a small business loan product with an average loan size of approximately RMB 75,000 (approximately $11,000) in mid-2008 for micro and small enterprises located in the Nanchong municipality of China. The company established its first branch and main office in the Jialing district, China.
New York-based AIG's Micro Financial Services draws across the breadth of AIG insurance and financial services, the company said. It currently has more than 1.2 million micro insurance policies in force in Colombia, Guatemala, Honduras, India, Indonesia, Mexico, Nicaragua, Pakistan, Uganda, Kenya and South Africa.
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