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UNITED NATIONS CAPITAL DEVELOPMENT FUND Microfinance |
Issue 5 / September - October 2004 |
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Spotlight Dear Colleagues, The big news in this update is that the Year of Microcredit website will be up by the first week of October at www.yearofmicrocredit.org. In addition to helpful information on key projects and resources on microfinance, the site will feature events, conferences and trainings related to the Year searchable by calendar or country. The most recent addition to a growing list of celebrities promoting the International Year of Microcredit 2005 is Anggun, an Indonesian pop star with chart-topping hits around the world. Since debuting in 1997, her hit singles have won her an award in France and landed her in the top 5 on the charts in Spain, Italy, England and East Asia. Her first album sold Double-Gold in France, Double-Platinum in Italy, Gold in Singapore, Gold in Switzerland, Platinum in Malaysia, Triple-Platinum in Indonesia, while selling close to 200,000 copies in the United States. Now, as a spokesperson for the Year, Anggun will perform at the launch in November and give continual support and publicity to the international effort. Forty-Five countries have informed the Secretariat that they are in advanced stages of designating National Committees and formulating activity plans for the Year. The UK National Committee recently launched their Year observance with an honored guest speaker and a look ahead at what can make the Year a success. UK Kicks Off International Year of Microcredit With Special Guest Muhammam Yunus Stuart Popham, Senior Partner at Clifford Chance and a member of Planet Finance, hosted this breakfast to kick-off the UKs programme of events in support of the Year of Microcredit 2005. More than 60 people from across the corporate, NGO and political divide attended the breakfast. Gareth Thomas, MP and Parliamentary Undersecretary of State at of the Department for International Development, described the organization’s support of microcredit as a sustainable development tool. In addition to its allocation of more than £18.5m in more than 7 countries, he set out microfinance’s contribution in reducing the power of the drug warlords in Afghanistan where their unregulated lending activities were being used as a lever of control. Annette Brookes, MP and Chair of the All Party Parliamentary Group on Microfinance, went on to detail the history and successes of the her group, its role in bringing different organizations together from across the UK into a working group to coordinate their activities to support the International Year of Microcredit. In response to the UN Secretary General invitation to Member States to establish National Committees or focal points to promote activities related to the preparation and observance of the Year, Annette was able to announce that the Secretary of State for International Development, the Rt Hon Hilary Benn MP, had officially designated the working group as the UK’s National Committee. To celebrate this announcement, Sheila Davie of Results UK introduced Yunus at the breakfast. Yunus sees the 2005 as a unique time to enhance the role of microfinance in achieving the Millennium Goals. With only 10 years to go, Yunus explained that making the targets set out in the Millennium Declaration is an overwhelming task, and in this respect, the events planned for the Year of Microcredit, must be designed to carry on after the close of 2005. Yunus continued to speak on how the work of the Grameen Bank fit in to this long term development process. He described how Grameen lends over $500m per annum and how the current aim is now to start converting MFIs into “Microcredit Banks” to enable them to start taking deposits and become increasingly self reliant by enabling them to generate their own funds. Yunus also shared his enthusiasm about education. Grameen funds 6000 scholarships each year, half of which are reserved for girls and the other half open to both girls and boys. Experience showed them that although
they had started out with the idea of wanting all Grameen children to finish
primary school; many in fact went on to college. Grameen now offers more than
Yunus sees Microfinance as a big opportunity for the mainstream-banking sector and would encourage this group to get involved. He is keen that the rest of the world learns from what has been achieved in Bangladesh and sees no reason why it can’t be replicated in the rest of the world.
Though plans are still being formulated, some organizations have already reported to the Coordinating Committee on their plans for promoting the goals of the Year. Excerpts from a few of these plans are described below: In addition to its activities as Joint Coordinator of the Year, the UN Department of Economic and Social Affairs is planning several events in 2005: an expert group meeting and a youth roundtable on "Microcredit/Microfinance and poverty reduction" in June 2005, in collaboration with the Youth Employment Network, the Economic and Social Commission for Asia and the Pacific (ESCAP) and other partners. An event highlighting the role of cooperatives in promoting microcredit for poverty reduction will mark the International Day of Cooperatives on 2 July 2005; and an event highlighting the contribution of microcredit to poverty eradication to mark the International Day for the Eradication of Poverty on 17 October 2005. The Economic Commission for Africa (ECA) plans to undertake a review and analysis of microcredit and microcredit institutions in Africa. The analysis will highlight good practices and identify opportunities and obstacles these institutions face in reaching the Millennium Development Goals. ECA also envisages the proclamation of a Microcredit and Microfinance Day in 2005, possibly in collaboration with the African Union, where the above study can be presented and widely disseminated. The Food and Agricultural Organization (FAO) will focus on the importance of microfinance in support of agricultural and rural development, and through the network of Regional Agricultural and Rural Credit Associations, will support regional workshops on good rural finance practices. Attention will be given to widely disseminating the Rural Finance Learning Centre, a new Internet based resources centre, being developed by FAO jointly with a number of international partners and aimed at contributing to the development of sustainable financial services in rural areas. FAO also proposes to promote good banking practices in rural areas and improved mechanisms for small-scale-farmers through preparing a set of guidance notes on finance and farmers. In addition, a major focus will be given to analyzing an emerging trend of linkages between the formal financial sector and rural and microfinance institutions. In 2005, the World Food day will adopt the theme "Rural credit for food security". The International Fund for Agricultural Development (IFAD) will officially launch the Year with a pre-launch event in Rome on 15 November 2004 and a one-day event at the Stock Exchange in Milan, on 18 November, 2004, in partnership with the Italian rating agency, Microfinanza. These events are intended to sensitize governments, donors and microfinance practitioners on the growing role of commercial banks in microfinance, helping to disseminate lessons from the field. IFAD also plans to support the harmonization of reporting requirements in partnership with the Microfinance Information eXchange (MIX) to increase access to this web-based reporting system for its rural finance partners. IFAD will share with donors and practitioners the outcomes of its research agenda on agriculture microfinance that was developed jointly with CGAP. The United Nations Development Programme (UNDP) will highlight the Year on its website and disseminate information on the Year through appropriate channels. Country office staff will be encouraged to engage with National Committees for the Year and the relevant UNDP staff is encouraged to share experience on how to successfully build inclusive financial sectors, and to lend input and experience to knowledge networks, discussion groups, forums and think tanks. In addition, UNDP has agreed to a thorough review of its microfinance portfolio by CGAP which, with support from UNCDF and UNDP, will implement a programme-country wide survey on the status of UNDP microfinance initiatives. At its quadrennial conference in June 2004, the United Nations Conference on Trade and Development (UNCTAD) held an International Forum on E-Commerce and E-Finance for small and medium-sized enterprises (SMEs) to analyze emerging techniques and modalities in the area of e-finance and address appropriate frameworks for developing new online solutions for credit information and risk management in order to ensure better access by SMEs to trade finance and e-finance. UNCTAD also envisages launching a public and private partnership in this field involving financial services providers, enterprises, public authorities, and regional and international development organizations. The World Bank
will pursue a number of activities guided by the fundamental principle of developing
financial systems that work for the poor. Efforts will be made to further elaborate
methods and indicators to measure the degree to which the poor have access to
financial systems in order to ensure that Country Assistance Strategy and Poverty
Reduction Support Programmes reflect the conditions and needs that low income
people and small businesses have for financial services. The Bank will finance
projects in numerous client countries aimed to engender sustainable expansion
of access to financial services. In 2005, projects devoted to increasing broad-based
participation in the financial system are expected to receive Bank funding in
India, Indonesia, Nicaragua, Mexico, Central Africa, Madagascar and Tanzania,
among others. In addition, a number of activities are planned to disseminate
knowledge gained from these projects, related to policies that expand the reach
of financial systems. The World Bank Institute will sponsor distance learning
for policy makers and members of civil society in addition to a series of educational
events focusing on improving the availability and terms of credit, savings,
insurance and payment services, including remittance payments in World Bank
client countries.
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