PRESS CONFERENCE ON MICROCREDIT SUMMIT CAMPAIGN REPORT

Press Briefing

PRESS CONFERENCE ON MICROCREDIT SUMMIT CAMPAIGN REPORT

“When we are speaking about an increase in the number of very poor women being reached by microcredit institutions, we are talking about more than just an extension of financial services to a sector of society that was previously unserved -- we are talking about a chance to start or expand a tiny business; to increase one’s income; to improve one’s dwelling; to purchase more nutritious food; to send the children to school; and much more”, Sam Daley-Harris, Director of the Microcredit Summit Campaign, told correspondents at a Headquarters’ press conference this morning. Also addressing journalists were Noeleen Heyzer, Executive Director of the United Nations Development Fund for Women (UNIFEM); Enid Daniels, of Enid Daniels Vending; and the Permanent Representative of Bangladesh to the United Nations, Anwarul Karim Chowdhury. The press conference, on the Microcredit Summit Campaign report, was sponsored by UNIFEM with the support of Friends of Microcredit at the United Nations.

Mr. Daley-Harris said the goal of the Microcredit Summit Campaign was to reach, by the year 2005, 100 million of the world’s poorest families, especially the women of those families, with credit for self-employment and other financial and business services. The poorest were defined as those living below a nation’s poverty line. Today, on the eve of the fourth anniversary of the United Nations Fourth Conference on Women in Beijing, the Microcredit Summit Campaign was announcing that 34 of the largest microcredit programmes around the world were reaching 1.1 million more poor women over the 12-month period since the end of 1997. In June of 1999 the total number of poorest women reached by those programmes amounted to 6.9 million. That 19 per cent increase marked a positive step on the path determined at the Beijing Conference in 1995.

The Microcredit Summit Campaign was also announcing that the 925 microcredit programmes reporting to the Campaign now reached a total of 12.6 million poorest women and men, he said. That was more than a 50 per cent increase in the total number of clients reached over the preceding year, from 8.1 million poorest clients at the end of 1997. In 1998, there had been 622 programmes reporting to the Campaign, while in 1999 there were 925 such programmes. The total number of clients reported for the years of 1998 and 1999 were 14.8 and 22.2 million, respectively.

Noeleen Heyzer, Executive Director of UNIFEM and Co-Chair of the Microcredit Summit Council of United Nations agencies, said that one year remained before the “Beijing+5” meeting when some of the results of the Fourth World Conference on Women would be assessed. One of the major areas of concern that had come out of Beijing was that of women and poverty and the feminization of poverty. Microcredit and microfinance in the hands of women could address those issues, reduce the proportion of women living in poverty and break the cycle of poverty. Microcredit was a tool to transform the lives of women. In partnership with civil society and the private sector, the United Nations system had been able to follow up on the commitment to help reach 100 million of the world’s poorest families by microcredit by the year 2005.

She said that she was very pleased with the campaign’s results. Seventy-six per cent of the clients -- reported by over 900 organizations dealing with microcredit -- were women, and that was, by any standard, “no mean achievement”. Those were the kind of results that she would like to see on many other fronts. Microcredit created a pathway to empowerment, she continued, which was also the framework that the Beijing Platform had used -- a pathway to participation and to the improvement in the conditions of women’s lives, as well as the lives of their children and whole communities. Building the economic assets of women was the first step on the way to the transformation that UNIFEM was hoping to see.

Enid Daniels, of Enid Daniels Vending, said that she belonged to a group called Faithful Pioneers, which was part of a microcredit programme based in the New York City area called Project Enterprise. Speaking about the impact of the programme on her life, she said that before her participation in Project Enterprise, she had been working 12 to 14 hours a day as a street vendor. Despite her best efforts, she could not pay her bills and get out of debt. A single mother, she had become so depressed that she had even contemplated suicide.

Project Enterprise had turned out to be the answer to her prayers, she continued. She took a loan of $1,500 for one year, and the repayment plan involved 25 equal payments of $60 bi- weekly. There was also a 12 per cent interest of $90, and that would be payable at the end of paying off the loan. The loan had provided her with the means of transportation and allowed her to get a cover for her merchandise to protect it from the sun.

Today, she still worked long hours, she continued, but now she was making some money. She no longer needed the services of loan sharks, to whom she had had to pay back $100 a day for 15 days on every $1,000 she borrowed. The repayment plan from Project Enterprise had allowed her for the first time in years to start paying off her debts and to rebuild her credit. The Project not only provided financial services, but also gave lessons on keeping income and expense ledgers. It also brought in motivational speakers to talk to the clients.

Also addressing correspondents, Mr. Chowdhury, the Permanent Representative of Bangladesh to the United Nations, said that he was Coordinator for Friends of Microcredit at the United Nations. His country had started microcredit activities more than 20 years ago. The Friends of Microcredit was a group of more than 50 ambassadors based in New York. At the inter-governmental level, the group, which had been set up soon after the Microcredit Summit held in Washington, D.C., in February 1997, was trying to ensure an effective contribution from all the United Nations agencies involved in the microcredit programme.

While the Microcredit Summit had been a non-United Nations conference, the group had brought its outcome into the United Nations and mainstreamed it in the activities directed at poverty eradication. Last year, a major first-ever General Assembly resolution had been adopted on the role of microcredit in the eradication of poverty, and the Assembly had also declared that the year 2005 would be the International Year of Microcredit. That would be the culmination of the nine-year programme that the Microcredit Summit had decided upon. Microcredit activities also had great implications in such areas as social development, women’s empowerment and so on. The “Beijing+5” Special Session would take place next June in New York, and he was sure that its outcome would give even larger focus to the microcredit activities.

Referring to the Beijing Platform for Action, a correspondent asked if microcredit activities could be considered its greatest success and what “other fronts” of activities were involved. Ms. Heyzer replied that while microfinance was very important, it was not the only area of activities. The fact that women were participating as decision makers in local village councils was a major achievement. Economic assets and political space and decision-making represented a powerful combination. Another major achievement that had come out of Beijing was that the issue of women in armed conflict had given rise to international work on women and peace. The combination of economic, political and social issues was very important, but more needed to be done.

Responding to a question regarding the accuracy of reports that the Summit received, Mr. Daley-Harris said that the Microcredit Summit Campaign focused on the 100 million poorest families. When the survey had first begun, the criteria had not been worked out. A year and a half ago, a poverty measurement discussion group had been organized with more than 700 participants from around the world, and a poverty measurement tool kit had been developed. Some of the tools involved such methods as evaluating the construction of houses, or determining if family members had shoes. There were not enough institutions in the world which could use quality poverty measurements to identify the poorest. Too often, the figures were an estimate. However, by the year 2002, the vast majority of programmes around the world would have and would be using a cost-effective poverty-measurement tool.

To go from 12.6 million at the end of 1998 and achieve the goal of reaching 100 million poorest clients by the year 2005, it was necessary to maintain the equivalent of a 35 per cent increase each year, he said. That also involved using best practices, institutions reaching down to the people below the line of poverty, and so on. The programmes needed to be strong, and the institutions needed to be solid.

Asked about the statistics on the success and failure rate for the clients of microcredit programmes, Mr. Daley-Harris said that he did not have the statistics right now. The four core themes of the Summit were reaching the poorest; reaching women; building financially self-sufficient institutions; and ensuring impact. Assessing and improving impact of microcredit on the lives of the clients was important. On the web site of the Campaign, >, one could find a paper on ensuring impact. Also, the questions on the action plan provided to the participating institutions included those on the number of clients who had succeeded after participation in microcredit programmes. More microcredit practitioners needed to use simple and inexpensive impact measurement tools. Particular figures needed to be included and improved.

To a question regarding feedback from people getting loans, Mr. Daley-Harris said the Microcredit Summit Campaign gave no loans and took no savings. It was “a kind of an amalgamation of people involved”. He noted that 3,200 institutions – like UNIFEM and UNICEF -- were members of the Campaign, and 1,600 institutions were microcredit institutions. Of those, 925 were asked to submit action plans annually. As to the practitioners, they sometimes never provided information.

A correspondent commented that while the report showed a remarkable number of loans in Asia and other parts of the third world, it demonstrated a strikingly small number of those in the Middle East. Asked to explain that difference, Mr. Daley-Harris said that on 4 November he would be moderating a panel at a conference in Morocco on microcredit. Panellists would include people from around the world. Last year, there had been a conference in the Middle East, and a number of countries of that region had taken part in it. The Campaign was trying to reach as many countries as possible in all regions of the world. As for the reason for the number being small, he said that microcredit was a relatively new intervention in the development of the third world. For that reason, it would “show up later” in a number of countries, including those of the Middle East.

In closing, Mr. Daley-Harris said it was very interesting that there was a 98 per cent repayment rate in “micro-banks” around the world. “Three meals a day instead of one; and the roof doesn’t leak anymore – that’s important. No longer beating one’s wife – that is profound. These programmes have the potential to have profound impact in the lives of women and their families around the world”, he said.

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