Microcredit Campaigners Claim Success in Helping World's Poorest
by Justin Cole
WASHINGTON - A program aimed at helping the world's poorest people with small business loans is well on its way to achieving its goal of reaching 100 million people, US-based activists said.
Nolberta Melara, sews an apron at her house in the Salvadorean city of San Marcos, in October 2006. The fifty-one-year-old woman saw her life transformed through a 30 dollar loan from the Support for the Microbusiness Centre, a non-governmental organization based on the Grameen Bank.(AFP)
Campaigners with the Microcredit Summit Campaign set an ambitious goal in 1997 of advancing tiny loans to 100 million of the most impoverished people, most of whom live in Asia, by the end of 2005.
While they conceded that they had not reached that milestone yet, the campaign said it expects to achieve its goal by the end of this year, having reached 82 million people by the end of 2005.
The Microcredit Summit report was issued shortly before some 2,000 delegates, including Nobel Peace Prize winner Muhammad Yunus, are due to gather for a November 12-15 summit in Halifax, Canada where new microcredit development goals will be chalked up.
Campaigners now want to advance microcredit assistance to 175 million of the world's poorest families by 2015.
Yunus, a Bangladeshi economist and microcredit pioneer whose Grameen bank has extended microloans to over 6.6 million people since 1976, is a member of the Microcredit Summit Campaign's executive committee.
Despite not reaching their overall goal, activists say the tiny loans, which are largely granted to people surviving on less than one dollar a day to start or expand small businesses, have benefited millions more people indirectly.
"The loans to 82 million poorest clients affected 410 million family members," said Microcredit Summit Campaign director Sam Daley-Harris.
The small loans average around 100 dollars and are often granted to illiterate individuals. No collateral is required.
"While it is not in the headlines, we are in a global poverty crisis," Grameen Foundation chief executive Alex Counts told reporters on a conference call.
Counts said campaigners are primarily targeting the 1.0-1.2 billion people around the world who live on less than one dollar a day in a bid to break a "generational cycle of poverty."
The campaign's 2006 report issued Wednesday cites the case of Balkisu Amadu who runs a roadside food stand in Ghana.
Amadu previously made no more than 81 cents a day profit from her simple food stand, according to the report.
However, in the past year Amadu has been granted four microloans, her income has more than quadrupled to four dollars a day, and she now wants to expand her food-selling business.
Microloans are offered at affordable interest rates and campaigners say they focus on extending loans to women because they often run a family's finances.
The 2006 report includes data from over 3,100 institutions worldwide and says that of the 82 million poorest people reached, 84 percent were women.
Activists also say that large banks, having historically shunned the world's poorest people, are suddenly taking more interest in the sector.
A study by the Dutch banking giant ING earlier this year concluded that "microfinance is on the rise," and found that "international banks are clearly paying much more attention to microfinance than ever before."
It suggested international banks could use "microfinance to advance their corporate citizenship policy."
Daley-Harris stressed that microloans are not a "panacea" for eradicating poverty, but said they are one of the most powerful tools in building self-esteem and self-sufficiency alongside education and healthcare.
Yunus, Queen Sofia of Spain, Honduras's President Manuel Zelaya Rosales and Pakistani Prime Minister Shaukat Aziz as well as academics and business executives are due to attend the Canadian summit.