Scott Hayes, a Citigroup Inc. private banker, has added a topic to his repertoire for cocktail party conversations: microfinance.
The Palo Alto, Calif., banker, who also raises the subject with clients and prospects, said he has been surprised by the number of people familiar with microfinance or eager to learn more.
Microfinance, the extension of loans and other financial services to poor people in developing countries - many of whom do not have access to banks - has long been a charitable cause. It is now maturing into a business attracting interest from investors who seek both financial returns and societal benefits.
Mr. Hayes is parlaying this growing interest into an opportunity to deepen relationships with current clients and attract new ones. Besides managing his clients' wealth, he can connect them with experts who can help them navigate this emerging market. "It's something I believe in, our clients believe in. It's something we enjoy helping them out with," he said.
His clients include venture capitalists, private-equity participants, and individuals who have started their own businesses. These entrepreneurs, who are concentrated in the Northwest, are particularly keen to help other entrepreneurs in the developing world, Mr. Hayes said. In some cases, personal ties to India, an active microfinance region, bolster their interest, he said.
Citi's private bank works with clients with at least $25 million to invest. Private bankers serve as liaisons, matching the company's resources with clients' needs, which range from estate planning to business financing to advice on buying art.
Robert Annibale, Citi's global director of microfinance in London, leads a group that works with its various business units and develops commercial relationships with microfinance institutions. That work includes making loans to these organizations - the banks, credit unions, and nonprofits that lend to the poor in the developing world - and helping them access capital markets.
A few years ago, Mr. Hayes said, he sought out Mr. Annibale, who was assuming his microfinance role at the time, because a client wanted to learn more about the business. That contact led to the first of what would become many meetings with Mr. Annibale and his private banking clients and prospects.
The efforts do not generate additional income for Mr. Hayes - at least not immediately. They do, however, underscore his role as a one-stop shop for clients and their far-ranging interests.
RSF, a San Francisco foundation that focuses on socially responsible ventures, signed on with Mr. Hayes a few years ago, partly because of Citi's commitment to microfinance, says Taylor Jordan, the foundation's director of investments.
Mr. Jordan was not with the foundation at the time, but he says he now speaks with Mr. Hayes about once a week on matters ranging from microfinance to lines of credit to interest rate swaps. The foundation, which has about $90 million of assets, invested about $1 million recently in a fund that invests in microfinance institutions around the world.
"Citigroup is well aware of the need to focus on building domestic markets" in developing countries, says Elizabeth Littlefield, the chief executive of the Consultative Group to Assist the Poor, a consortium of development agencies affiliated with the World Bank. "That is absolutely the right thing to be doing."
