UNITED NATIONS CAPITAL DEVELOPMENT FUND    Microfinance

Issue /

Spotlight

Update on the International Year of Microcredit 2005

Featured Guest

Q & A with Lize Nhaca, Mozambique Entrepreneur

News

Microfinance in focus

Voices of Microfinance

Responses to a question posed to experts and practitioners.

Upcoming Events

Conferences, events and trainings.

Links

New websites and publications.

Share your news!

If you have a current news story or know of an upcoming event that would be of interest to the network, please email the Editor, Emily Krasnor.

Spotlight

UN Launches International Year of Microcredit 2005

Microentrepreneurs Ring in the Year by Opening Stock Exchanges around the World

18 November 2004 — The United Nations launches the International Year of Microcredit today in an effort to build support for making financial services more accessible to poor and low-income people. It will aim to raise public awareness about microcredit and microfinance, and promote innovative partnerships among governments, donors, international organizations, non-governmental organizations, the private sector, academia and microfinance clients.

The Year’s overarching goal is to provide greater access to credit, savings, insurance, transfer remittances and other financial services for poor and low-income households in order to move towards more secure livelihoods and prosperous futures.

“The world has set an ambitious course to meet the Millennium Development Goal of cutting in half, by 2015, the proportion of people living on less than one dollar a day. Microfinance is a powerful tool to help us get there,” said Mark Malloch Brown, Administrator of the United Nations Development Programme (UNDP).

Although microcredit and microfinance have already had a positive impact on the household income and quality of life of millions of poor people, many still lack access to financial services that could raise their standard of living and protect them against economic setbacks. Billions of people could benefit from financial services, although today only a tiny fraction of this demand is being met. To meet this huge gap in services, the Year calls for constructing inclusive financial sectors that strengthen the powerful, but often untapped, entrepreneurial spirit that exists all over the world.

“By viewing poor people as vital contributors to their local and national economies, the International Year of Microcredit 2005 has the potential to unleash a new wave of microentrepreneurship, giving poor and low-income people a chance to build better lives,” said José Antonio Ocampo, Under-Secretary-General of the UN Department of Economic and Social Affairs (UNDESA).

Launch observances are beginning the day with the ringing of opening bells at stock exchanges around the world by microentrepreneurs from Cambodia, the Dominican Republic, Indonesia, Mexico, Rwanda and the United States. The participants are all recipients of the Global Microentrepreneur Awards coordinated by Harvard Business School and other graduate schools. In New York, local microentrepreneur award winners are scheduled to open the NASDAQ market, while nine exchanges from Karachi to Zurich and from Manila to Maputo are also taking part in this coordinated initiative.

“Stock exchanges play an essential role in efficiently allocating capital in national economies and globally,” said Stanley Fischer, Vice Chair of Citigroup and Chair of the Advisors Group for the International Year of Microcredit 2005. “Today, the world's stock markets are focusing on the people to whom this Year is dedicated: microfinance clients.”

At opening celebrations at UN Headquarters in New York and elsewhere throughout the world, experts will address the challenge of expanding the reach of microfinance by identifying best practices and the hurdles to wider availability.

Another primary aim of the Year is to increase public awareness about the reliability of microfinance clients, especially women, in repaying loans, managing household incomes, building assets and enterprises and contributing to the economy.
One key need is to collect and analyze hard data on the state of microfinance: its availability by region, client profiles, and types and quantities of services offered. As part of the Year’s activities, a Data Project will bring together expert statisticians and researchers from the Bretton Woods Institutions and the UN, in collaboration with governments and the private sector, to address current data gaps, anticipate future needs, and build agreement on the best way forward for donors, private investors and practitioners.

In addition, the “Blue Book” project will seek to identify constraints and opportunities for the promotion of inclusive financial sectors, culminating in recommendations of concrete actions that countries can take to make microfinance an integral part of national financial systems.

The UN General Assembly has designated the UN Capital Development Fund (UNCDF) and the UN Department of Economic and Social Affairs (UNDESA) as focal points to coordinate the activities of the United Nations system for the International Year of Microcredit 2005.