8 November 2005
Princess, at Opening of Two-Day Forum, Lauds International Year of Microcredit as Huge Step in Providing Vital Financial Services to Poor
Event to Include Panels on Microfinance, Inclusive Financial Sectors
(Re-issued as received.)
NEW YORK, 7 November (UN Headquarters) -- The International Year of Microcredit, 2005 was a huge step forward in providing the entrepreneurial poor with badly needed financial services, which were as vital to economic development as roads and electricity, Princess Maxima of the Netherlands said today at the opening of a two-day event to culminate the Year.
Addressing participants at the United Nations International Forum to Build Inclusive Financial Sectors, she said that access to financial services, including accessible and affordable accounts, as well as loans, helped millions of people worldwide to reduce poverty, build trust and dignity, and determine their own futures. Women were especially empowered by access to microfinance in establishing small businesses, which helped them increase their family's living standards, send their children to school, and become influential voices in their communities.
She added that the biggest challenge was to make financial services accessible on a big-enough scale to make a macroeconomic difference, stressing that they must become affordable, as well as commercially viable, efficient and profitable. In efforts to expand financial services to that extent, mainstream financial services firms must enter the microfinance sector, and dedicated professionals -- in short supply in many developing countries -- must lend their services where needed.
Paul Wolfowitz, President of the World Bank, stressed the need for reliable, continuing access to financial services for the poor, rather than one-off loans, which should be provided on a par with mainstream financial services. The World Bank had published a report focusing on the myriad regulations and fees hindering small businesses, which could help Governments in identifying obstacles that should be removed in providing those services.
Emphasizing that the financial infrastructure must also establish credit bureaux, delivery technologies and payment systems, he said the World Bank was advising both the public and private sectors on providing the poor with financial retail products. Although financial services were primarily a private-sector activity, Governments had a critical role in setting policies and regulating the industry to minimize market distortions (through interest rate caps, for example).
Similarly, Kemal Derviş, Administrator of the United Nations Development Programme (UNDP), noted that the importance of financial services in fuelling economic growth was now increasingly being recognized in both the public and private sectors. The most significant endorsement had been the designation by the United Nations of 2005 as the International Year of Microcredit. More than 300 events had been held around the world, rallying people from all walks of life to focus on financial sector barriers and opening up such services to the poor.
José Antonio Ocampo, Under-Secretary-General, United Nations Department of Economic and Social Affairs and Co-chair of the International Year of Microcredit, stressed that access to financial services for the poor was essential to reaching the Millennium Goal of halving extreme poverty by 2015. A major initiative of the International Year had been The Blue Book on Building Inclusive Financial Sectors for Development, which analysed why the vast majority of people had no access to financial services, and provided a set of policy actions for Governments and their development partners in reversing that trend.
The opening ceremony for the Forum, which was a joint informal event of the General Assembly's Second Committee (Economic and Financial) and Third Committee (Social, Humanitarian and Cultural), was to be followed by eight interactive panels on various aspects of microfinance and building inclusive financial sectors worldwide.
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