|
|
|
|
 |
|
UNITED NATIONS CAPITAL DEVELOPMENT FUND Microfinance |
Issue 1 / January - February 2004 |
|
|
Voices of Microfinance There seem to be differing views on the definition of the terms "microcredit" and "microfinance". Microfinance Matters has solicited the opinions from the international community to provide some valuable insight into what these concepts are and how they fit together. Responses to a relevant "question" will appear in every issue, and we look forward to hearing many diverse voices on issues concerning poverty alleviation and the provision of financial services to poor and low-income people. "Microfinance" is a term I suggested in 1990 to the Economics Institute in Boulder instead of microcredit. Microfinance was meant to stand for financial intermediation between microsavers and microborrowers, or, in other words, to comprise microsavings and microcredit. At the time, I worked for Bank Indonesia and GTZ, 1988-91. From there, it spread around the world and took on many different connotations. Hans Dieter Seibel, Development Research Center, University of Cologne, Germany Micro finance is the provision of a wide range of financial services, such as deposits, loans, and insurance. The basic principle of micro finance is a provision of a package of financial services to low-income households. Microcredit (which is a component of micro finance) is a provision of credit facilities to low income household. The basic principle of micro credit is to give poor people access to capital and exploit their capacities and potentialities for economic development. The fundamental difference between these two terms are understanding of poor people economy and livelihood conditions. Thus, microfinance covers the acute need of poor people's financial services and protect from being further vulnerable but micro credit seems to be more technical and standalone approach to provide only credit services. Krishna Pathak, Microserver, Nepal Este es un concepto mucho màs amplio en el contexto de desarrollo de las microfinanzas. Contiene no solo la oferta de servicios crediticios a los microempresarios , sino una oferta de otros servicios como los que ofrecen las entidades reguladas: por ejemplo los ahorrros, la tarjeta de credito, el credito hipotecario, gama de diferentes seguros. etc. Para ello se requiere que la instituciòn operadora de los servicios este enmarcada dentro de un marco legal que le permita operar en terminos de regulaciòn de las superbancaria. El concepto de microcredito se refiere a un credito dirigido a una unidad productiva. bien sea de comercio , de producciòn o servicios. Margarita Correa, Medellin Colombia Consideramos que microcrédito es un término que se refiero a uno de los servicios que nuestras instituciones están realizando. La evolución de las instituciones a partir de las necesidades de sus clientes nos han llevado a innovar en los servicios y se han incorporado productos de ahorro vista, ahorro a plazo fijo, seguros, remesas, pensiones. Con el tiempo se irán incorporando nuevos servicios que harán que las instituciones sean más competitivas. Por último considero que otra razón para el cambio de la terminología es ayudar a que las instituciones sepan que sus posibilidades son mucho más amplias y no están sólo en un producto. Vicente Fenoll CEO, FinComún Mexico Microfinance refers to all financial services made available to the poor (including savings, insurance, etc), whereas microcredit is a sub-category within microfinance referring only to credit services. Yee Woo Guo, UNCDF Evaluation Unit, USA Poor women and their families need and want microfinance-not just microcredit. In WWB surveys with poor women entrepreneurs and producers around the world, they say that they want a safe place to save. They want financial services that fuel their multiple economic activities. They want to build their homes. Poor women around the world want financial products and services geared to helping them build income, assets, and livelihoods-helping them build their businesses, families and communities. Microcredit implies a mono-product-a small loan. Poor women want to build assets-not debt. Nancy Barry, President, Women's World Banking USA Micro-finance in our part of the world (West Africa) is an organized economic development strategy that offers several types of financial services aimed at assisting large numbers of low income people establish/grow their small and medium businesses in order to generate sustainable income for the reduction of poverty and achievement of quality life. Services normally rendered under micro-finance include the promotion of a savings culture, the provision of credit for working capital, training in business skills, education on health and reproductive issues and the offering of other products such as relevant insurance policies. While micro-finance takes a holistic view of the poverty in society and designs ways of eradicating it through various services, micro-credit only covers the provision of small loans without necessarily taking into account issues that affect the loan beneficiary's quality of life. It is simply a component of micro-finance programme. Paulina Dsani, Executive Director, Women's World Banking, Ghana Access to productive assets and financial services is the challenge for the survival of the poor population all over the world. History clearly indicates that overtime, the poor has made efforts on their own to overcome the challenge through early contact with traditional institutions and some private arrangements made within their local environment. These efforts were risky and inconvenient. The search for a system that would provide them with a sustainable bridge over the lack of collateral and the capacity to conduct business in a commercial setting has led to the evolution of Microcredit and Microfinance. Microcredit refers to small loan packages provided to the poor to enhance their capacity to engage in productive activities for the improvement of their livelihoods. As a form of credit, the loan is recoverable within the provisions of the agreement under which it is disbursed. Microfinance refers to small loan packages supported with financial services provided to the poor. This is usually conducted through the intermediation of a financial institution with the specific objectives to enhance the capacity of the poor to access financial services and to enable them expand their businesses and increase their income to ensure a sustainable livelihood. Bertram S. C. Egwuatu, Assistant Resident Representative (Programme), Head of Poverty Alleviation and Social Development Unit, UNDP Nigeria Country Office-Lagos, Nigeria Microfinance comprises financial services (among them: microcredit, (microsavings, microinsurance, etc) dedicated to people, mainly from the informal sector in developing countries or people expelled from banking in developed countries, who do not have access to commercial banks. Therefore, microfinance is larger than microcredit but includes microcredit as microcredit is one of the financial services one can receive from an MFI. Jean-Nicolas Béasse, Société Générale France "Microfinance" relates to the provision of a broad range of financial services such as savings, loans, insurance, leasing and money transfer to micro-entrepreneurs from low-income households through microfinance institutions. On the other hand, "micro-credit" often referred to as "micro-debt" emphasizes the provision of credit services to low income clients, usually in the form of small loans for micro-enterprises and income generating activities through financial intermediaries. While the term "microfinance" provides greater focus on design and delivery of an array of savings, loans, insurances and other products/services required by households below the poverty line for livelihood, "micro-credit" does not include financial services required by the poor due to its exclusive focus on credit services. Nara Hari Dhakal, UNDP's Asia-Pacific Regional Programme on Macroeconomics of Poverty Reduction, Nepal Micro Credit alone has a limited impact in the lives of the poor. Unless other essential financial services - savings, insurance and planning, are added to it, the poor are not able to improve their economic status. Microfinance includes all these essential financial services. Microfinance aims to promote sustainable livelihood options and to ensure reduction in the vulnerability of poor households through asset creation and social security. Viji Das, Friends of Women's World Banking, India Microfinance can be defined as the portion of financial intermediation that has been adapted to the needs and realities of those who don't have access to conventional systems. Its main functions are the pooling of funds (taking deposits), risk management - mainly through insurance -, transfer of economic resources by lending funds and in some cases provide a payment system. Microcredit is that portion of Microfinance that deals with the transfer of economic resources to the poor through the lending of funds borrowed on the financial markets or received from donors. Stéfanie-Myléna Leduc, Développement International Desjardins, Canada |
