Bringing Financial Services to the Poor and Unbanked in Developing Countries
Microfinance stakeholders gathered in Luxemburg recently to promote cooperation amongst Europe-based microfinance bodies operating in developing countries and to discuss how financial inclusion for the world’s poor can be enhanced to help achieve the Millennium Development Goals.
TheEuropean Microfinance Platform (eMFP), a growing multi-stakeholder network of over 120 members, organised the European Microfinance Week 2010, which took place on 30 November – 1 December 2010.
Microfinance is seen by the European Commission as one of a number of tools that can help reduce poverty. Staff from EuropeAid with thematic and project management responsibilities in microfinance, attended the European Microfinance Week.
EC attendees contributed towards two events on the work of the Commission in this sector, focusing on capacity building for microfinance institutions (MFIs). The EC also co-facilitated a session on savings mobilisation with the Consultative Group to Assist the Poor (CGAP). Examples of EC-funded projects were present through dedicated stands in the Plaza, including an initiative on transfer services for remittances through MFIs.
A full round-up of the week’s presentations can be accessed on the eMFP's website.
Of particular interest are:
- A presentation of the overall role and approach of the EC in microfinance, including an outline of the Guidelines to EC Support to Microfinance and of the EC's current global portfolio in this sector.
To view the presentation follow this link: http://www.slideshare.net/Capacity4Dev/ec-microfinance-focal-point-emfw2010
- A presentation on the second phase of EU-ACP Microfinance Programme: One of the most significant examples of EC cooperation with the African, Caribbean and Pacific countries on inclusive finance.
To view the presentation follow this link: http://www.slideshare.net/Capacity4Dev/presentation-microfinance-eu-acp-countries
Further information about the EU-ACP Microfinance Programme, including illustrative videos, is available online, at:
European Microfinance Award 2010: HARBU and 'Value Chain Finance'
At the European Microfinance Week, a ceremony was held for the award of the third European Microfinance Award: a grant of 100,000 Euros from the Luxemburg Ministry of Foreign Affairs and Development Cooperation. The bi-annual prize is awarded to projects or organisations that promote breakthroughs in the field of microfinance. The theme chosen for the 2010 award was 'value chain finance'. The winner of the prize was Harbu Microfinance Institution from Ethiopia, for its contribution to the evolution of financial services to value chains in the developing world.
When it was established in 2005, Harbu’s primary objective was to help dairy farmers forge better links with retailers and the women's organisations that processed their milk. Today, Harbu offers banking for both the rural and urban poor, helping producers, retailers and manufacturers at all stages in the value chain. To read more about Harbu, follow this link.
At the European Microfinance Award Ceremony, the EC’s Commissioner for Development, Andris Piebalgs, addressed attendees through a pre-recorded video presentation.
"I see the role of microfinance as one of the building blocks in support for local, thriving micro and small enterprise sectors, creating jobs and helping communities to raise their incomes,” said Mr Piebalgs in the video, which can be viewed in full here.
Microfinance stakeholders should continue to develop a wide range of financial products. These include not only credit, but savings and insurance products, money transfers and payment systems, explained Mr Piebalgs.
"The expansion of financial inclusion," said Mr Piebalgs, "can help millions of poor households to better cope with financial risks and reduce their vulnerability to social, economic and environmental shocks."
Mr Piebalgs stressed the need for the Commission and other donors to continue cooperating with the private sector and work with local institutions to ensure that appropriate and sustainable financial services are available also to the poor and unbanked in developing countries. A transcript of Mr Piebalgs’ speech is available here.