Preparing the Future of Development: Microfinance in the emerging post-2015 development Framework

The implementation period of the Millennium Development Goals (MDG) is drawing to an end. By January 1st, 2016 the International community owes it to the poor of the planet - and indeed, it owes it to itself - to define a new international development framework for the post-2015 period.

Ever since the Rio+20 Summit of June 2012 the collective awareness about the need to act has found multiple strands of expression in the spheres of international public life, as well as in the international civil society. The exceptionally broad consultation processes that have been launched worldwide bear witness to the declared intention to work in a genuinely participatory approach.

The recently published Report of the High-Level Panel of Eminent Persons on the Post-2015 Development Agenda has attracted much international attention and will help, before the intergovernmental negotiations start, to focus the discussions that were so far mainly characterized by their broad scope. In July 2012 the panel members were appointed by UN Secretary General Ban Ki-moon. Following the lead of their three co-chairs – the Presidents of Indonesia and Liberia and the Prime Minister of the UK - they chose to title the report “A New Global Partner-ship: Eradicate Poverty and Transform Economies through Sustainable Development”. In doing so, the panel is conveying the message to stay the course of the MDGs and to build on the Rio+20 process, while digging deeper by fighting remaining inequalities and promoting sustainable and – above all – inclusive growth.

Eminently readable, the report of the High-Level Panel provides a pertinent outline of the topics that need to be addressed in order to define the next internationally agreed development framework. The panel members have identified “five big transformative shifts”:

  1. Leave no one behind
  2. Put sustainable development at the core
  3. Transform economies for jobs and inclusive growth
  4. Build peace and effective, open and accountable institutions for all
  5. Forge a new global partnership.

Also, a new set of 12 universal goals, each with three to five targets to be set and met at the national level, are being proposed in the report.

For the members of the European Microfinance Platform the references to “financial services” in the report will be of interest in view of the ongoing discussion and the general positioning of microfinance and financial inclusion in the fight against poverty. Throughout the text of the report and its important annexes, the need of better access to financial services is prominently stressed in the contexts of fighting gender inequality and promoting job creation.

Goal number 2 on empowering women and girls and achieving gender equality is based on the observation that “far too many women continue to face oppression and deeply embedded discrimination. This affects everything from access to health and education to the right to own land and earn a living, to equal pay and access to financial services, to participation in decision-making at local and national levels, to freedom from violence”. Consequently one of the targets to achieve insists, among other requirements, on the right of women “to own and inherit property, sign a contract, register a business and open a bank account”.

Furthermore, one of the targets under goal number 8 on creating jobs, sustainable livelihoods and equitable growth, aims at “strengthening productive capacity by providing universal access to financial services and infrastructure such as transportation and ICT”. The underlying analysis further claims that “financial services are critical to the growth of business, but also raise the income of individuals. When people have the means to save and invest or get insurance, they can raise their incomes by at least 20 per cent. ... We need to ensure that more people have access to financial services, to make the most of their own resources”.

Clearly, the High Level Panel has recognized the transformative power of access by poor populations, especially girls and women, to financial services adapted to their needs, as well as the need for a wide range of different financial instruments to meet these needs as they occur at different moments in time and in different economic, social and cultural environments.

In the ongoing discussions on the post-2015 development framework, UNCDF, as the lead agency for inclusive finance in the UN system and in support of Her Majesty Queen Máxima’s mandate as the United Nations Secretary General’s Special Advocate for Financial Inclusion, will continue to plead and enact the case of microfinance and financial inclusion as powerful enablers and accelerators of development throughout sectors and development goals. We will do so, because we are convinced that there will be no sustainable development without sustainable financing for development, and that there will be no inclusive growth without inclusive finance.