Citigroup has set aside a $200 million fund for small and midsize businesses to jumpstart lending, the bank’s CEO Vikram Pandit told CNBC Wednesday.
“We’re working with ‘last mile’ providers that need funding,” said Pandit, who used a cable industry reference that means effecting the last leg of delivering connectivity to a customer. He said that Citi needs to work hard to find smaller companies that need loans. The bank's lending is up one third year over year, said the CEO.
“We just started a $200 million fund that we’re going to put at the beck and call at people who work with small businesses to get that lending going,” he added.
Pandit said that small and midsize businesses used to rely on smaller banks for their loans, but because of the financial and housing crises, some of those banks have either shut down or are dealing with commercial mortgage debt and are unavailable or unable to lend to businesses.
He added that the issue of supply and demand “seems to be clearing. On the smaller size, there are a lot of issues that have to do with industrial structure of how credit gets put out there.
“Again, it’s about the 'last mile.' You do see the demand occasionally,” he said, “but it’s hard to make demand and supply match on the ground, and that’s what we’re trying to deal with.”