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UNITED NATIONS CAPITAL DEVELOPMENT FUND Microfinance |
Issue 3 / May - June 2004 |
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Featured Guest | José Antonio Ocampo
Note from Under-Secretary José Antonio Ocampo
The UN General Assembly has proclaimed the year 2005 as the International Year of Microcredit. The timing could not be better. With 2015 as the target date for the achievement of the Millennium Development Goals, it is the right time to illustrate how microfinance allows poor households to move from everyday survival to planning for and investing in their own future. The Year observance will mark ten years before all countries are to meet the targets formally set at the Millennium Summit in September 2000. As the United Nations Under-Secretary-General for Economic and Social Affairs and as co-chair of the Year’s Coordinating Committee, it gives me great pleasure to be part of this tremendous opportunity to highlight microfinance as a key instrument to contribute to the achievement of the Millennium Development Goals, specifically the primary goal of halving the proportion of people whose income is less than $1 a day. The use of microfinance services by low-income households is associated with financing a household’s long-term goals and fueling the growth of an enterprise as well as the local private sector. Microfinance is a tool that promotes investment in the productive capacities of local communities, stimulates local markets, and extends employment opportunities. It is roughly estimated that almost 1 billion of the world’s total population could benefit from access to microfinance; however, currently long-term access is provided to only a small percentage of the population. The unmet need for sustainable access to financial services for poor and low-income people is underscored when one observes that the significance and magnitude of impact is positively related to the length of time that clients have been in a microfinance program. Though it is the goal of financial systems to allocate capital and support economic flows, their current character in many developing countries does not reflect the needs of the population. Thus, microfinance will not achieve its full potential unless it can be integrated into the formal financial sector. Efficient financial systems are vital for the prosperity of a community and a nation as whole. To ensure that poor people are included in the benefits of development, it is necessary that these vast numbers have consistent access to financial services, access that can translate into a key element of economic growth and poverty alleviation: options. It holds true across people and places that a significant deepening of access to financial services can have a large-scale impact on the quality of people’s lives. Thus, it is necessary to build inclusive financial sectors that include people from all income levels and support the long-term growth of vibrant national economies. It is my honor to invite you to join in raising awareness of the range of microfinance instruments, and expanding the reach of financial services on a sustainable basis. The Year aims to change the perception of poor people so that
they may be viewed as entrepreneurs who are capable of lifting the economic
fortunes of their communities to new and unforeseen heights. This change in
perception should open the door to a new influx of capital and lead to more
inclusive financial sectors, as low-income people become increasingly perceived
as valuable clients. Together, we can illustrate and promote microfinance as
a tool to strengthen the powerful, but often untapped, entrepreneurial spirit
existing in impoverished communities and address the challenge of building inclusive
financial sectors.
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