|
|
|
|
 |
|
UNITED NATIONS CAPITAL DEVELOPMENT FUND Microfinance |
Issue / |
|
News | First Microcredit Summit in the Middle East - Africa Region Takes Place in Jordan SG Kofi Annan Sends Message Calling for the Integration of Microfinance in the Formal Financial System in the Arab States Over 650 experts and practitioners in the field of microfinance attended the Middle East/Africa Region Microcredit Summit, organized by the Arab Gulf Program for United Nations Development Organizations (AGFUND) and the Microcredit Summit Campaign, which took place in Amman, Jordan from 10 to 13 October. Welcoming participants from 75 countries, her Majesty Queen Rania al-Abdullah of Jordan, hosted of the event. She is not new to microfinance as she currently serves as a Board Member of Finca International and has recently joined the Year of Microcredit Patrons Group as an Emissary. Queen Rania has also been an active supporter of microlending in her own country, having started a community empowerment program in Jordan aimed at enhancing the economic and social well-being of women in underprivileged communities by establishing sustainable community-operated projects as part of her Jordan River Foundation. In a statement read at the conference Queen Rania said, “Microfinance enables individuals to enhance their lives. It is not a reward or privilege, but a right that should be enjoyed by all members of society.” In Amman, AGFUND President HRH Prince Talal Bin Abdul Aziz announced an initiative for an Arab-African microcredit fund and heralded Arab leaders and the Arab League to prioritize the fight against poverty in the agenda of upcoming Arab summits. Specifically in the Arab States, the number of active borrowers has quintupled since 1999; active borrowers now number over 710,000 with an outstanding loan portfolio of about $240 million though market penetration is still quite limited with 3 million entrepreneurial poor who still lack access to finance (for more information see: http://www.uncdf.org/english/microfinance/books/arab_states.php). In an effort to acknowledge “action in developing countries with the aim of alleviating human suffering and pain” the AGFUND annual prize of $300,000 in 2005 will be awarded to an organization that best illustrates, "microcredit helping to achieve the millennium development goals." The selection of this subject reflects the AGFUND’s interest in contributing to the efforts of the International Year for Microcredit in 2005. Past prizes have recognized achievement in combating HIV/AIDS and helping the plight of refugees. More information on the 2005 prize focusing on microcredit is available at: http://www.agfund.org/english/prize/prize-2005.htm Secretary-General Kofi Annan,
in a message to Middle East/Africa summit meeting, calls the microfinance movement
a success story of last decade. He also highlights the International Year of
Microcredit 2005 as an opportunity to enhance the impact of microfinance on
social development and the on the lives of poor people.
The microfinance movement is one of the success stories of the past decade. Over these 10 years or so, we have seen that, under the right conditions, access to financial services enables poor people to increase their incomes, build assets and reduce their vulnerability to crises. Whether in Africa, the Middle East, Asia or Latin America, this has contributed to the empowerment of women and to better results in education, nutrition and health. Yet only about 10 per cent of the world’s estimated 1 billion economically active poor have access to basic financial services. In most developing countries, that is because poor clients are perceived as more risky and less profitable. Since Governments and donors have only limited capacity to meet this supply shortfall, we need to involve microfinance institutions that can mobilize resources locally. At the same time, we need to ensure that that such institutions apply sound business practices, maintain operational sustainability, adhere to good governance and clear and transparent reporting, and keep in sight the overall goal of serving low-income clients, including the poorest of the poor. While microfinance in the Arab States region is expanding, key challenges remain. These include the need for product diversification, capacity-building, donor dependency, and reform to promote the integration of the microfinance sector in the formal financial system. In Africa, microfinance institutions are striving to increase outreach and sustainability, and have adopted microfinance approaches such as savings and credit unions, cooperatives and non-governmental organizations that provide credit. But given their lack of access to resources and the absence of an enabling economic environment, many microfinance institutions remain dependent on external assistance. The International Year of Microcredit, 2005, will be an opportunity to build greater awareness and understanding of the role microfinance can and should play in the eradication of poverty, its contribution to social development and its impact on the lives of people living in poverty. The United Nations General Assembly has invited Member States to establish national coordinating committees or focal points to coordinate activities for the Year. In this way Governments, in partnership with other stakeholders, can take an important step towards coordinating their activities nationally and regionally to create inclusive financial sectors for the poor. I am sure that this gathering will make a valuable contribution to the preparations for the International Year. In that spirit, I send my warmest greetings to all participants, and wish all of you a productive meeting.
|
