Richard Weingarten
Executive Secretary, UNCDF
Statement for the launch of State of the Microcredit Summit Campaign Report 2005
7 December 2005
Note: this statement was delivered at the United Nations Secretariat on Wednesday, 7 December, at the launch of the State of the Microcredit Summit Campaign Report 2005. More information on this report is available on the Microcredit Summit Campaign website.
Sam Daley-Harris, Director of the Microcredit Summit Campaign, briefs correspondents on the "State of the Microcredit Summit Campaign Report 2005", 7 December, at UN Headquarters. UN photo by Devra Berkowitz.
Richard Weingarten: It is very fitting that we are here for the release of the State of the Microcredit Summit Campaign Report 2005, coming as it does at the end of the United Nations International Year of Microcredit. This Year, as many of you know, was highly successful in raising global awareness regarding microfinance. It ended in November and was sponsored by UNCDF and the UN Department for Economic and Social Affairs.
More than100 countries officially observed the Year, and 61 national microfinance committees were set up worldwide. In addition, 350 events were held around the world to build expertise and awareness of providing financial services for poor people. Also, at the end of the Year, the Global Microentrepreneurship Awards Programme drew 3,698 entrants from 1,154 microfinance institutions. Nine microentrepreneurs from Afghanistan, Bangladesh, Liberia, South Africa, India, China, Malawi, Sierra Leone and Peru were flown to New York to share their experiences with the world. They were presented with awards at an international gala event at the United Nations.
To continue one of the Year's most important initiatives, UNCDF is working with the World Bank, CGAP, DFID and others on a data project that is bringing together a small group of expert statisticians and researchers to gather concrete data on access to microfinance at all levels. We are also nearing completion of the "Blue Book" project, an innovative global consultation, begun during the Year of Microcredit to address the challenges of building inclusive financial sectors. Together with the Financing for Development Office of DESA, UNCDF is leading a process to identify key constraints and opportunities for the promotion of inclusive financial sectors in the world's poorest countries. This effort has been guided by a multilateral steering committee comprising the World Bank, the IMF, the ILO and IFAD. The project is based on the commitment of Secretary General Kofi Annan to the goal of "addressing the constraints that exclude people from full participation in the financial sector." The results will be published early next year.
Thus, it is clear that microfinance has truly had a coming out on the world stage. The Year had its genesis in the indefatigable efforts of the previous and current Permanent Representatives to the UN from Bangladesh: Ambassadors Anwarul K. Chowdhury and Ambassador Dr. Iftekhar Ahmed Chowdhury. I understand that their inspiration for the Year was largely derived from the 1997 Microcredit Summit, which brings me back to the reason I stand before you today.
We are encouraged by the information coming out of the State of the Microcredit Summit Campaign Report 2005, which is being launched today. This report highlights some very good news. It is encouraging to see that 92 million families received a microloan in 2004 and that 66.6 million of these were among the very poor when they took their first loan. Of this total, 84 percent were women. Overall, it is estimated that 333 million members of very poor families were served by MFIs last year.
Thus, microfinance has made considerable progress in recent years, from a relatively humble beginning it has grown to become an important part of the global financial services marketplace. But there is much to do: The demand for microfinance services remains largely unmet, especially in Africa. As you will read in the report, 90% of current microfinance clients worldwide are in Asia - with 10% spread across the rest of the world. In Africa, for example, only 8.5% of the potential market is being served - leaving 91.5% of the very poor without access to the financial services they need to lift themselves out of poverty. In Latin America and the Caribbean, the statistics are only slightly better, with coverage of only 11.6%.
Expanding access to microfinance is a challenge that will occupy us for many years. It is a critical undertaking if we are to eradicate poverty and achieve the Millennium Development Goals. As more than 1 billion people still live on less than $1 a day, it is a challenge in which we hope to enlist your help and support. Thank you, all of you, for your past and continued assistance. Together, we can turn the Year of Microcredit into the Age of Microfinance, where all people, no matter how poor, have access to the types of financial services they need to lift themselves out of poverty.
