Citi launches $200 mn to fund US small business

BANGALORE, INDIA: Citigroup Inc said on Wednesday it has launched a $200 million fund to help spur small business lending in low income U.S. communities.

Citi has tied up with Calvert Foundation and Opportunity Finance Network (OFN) to deliver financing for small business and community development, it said in a statement.

Calvert Foundation is a non-profit organization that manages more than $200 million raised from thousands of investors. OFN, a financial intermediary, had originated more than $23.5 billion in financing through 2008.

Citi will provide $199 million of capital through a combination of equity and loans. Calvert Foundation and OFN will contribute the $1 million balance, the bank said.

"Too many small businesses, microenterprises, charter schools and community service institutions simply do not have access to credit, yet they are engines for economic growth," Citi chief executive Vikram Pandit said in a statement.