GENERAL ASSEMBLY GREENLIGHTS PROGRAMME FOR THE INTERNATIONAL
YEAR OF MICROCREDIT 2005
Observance Will Promote Access to Financial
Services and Empowerment of Poor, Especially Women
NEW YORK, 29 December (UNCDF/DESA) -– The United Nations General Assembly passed a resolution last week supporting the Programme of Action for the International Year of Microcredit 2005. The Year will provide an occasion to raise awareness of the importance of microcredit and microfinance in the eradication of poverty, to share good practices and to further enhance financial sector development that supports sustainable pro-poor services in all countries.
On the resolution’s significance, Secretary-General Kofi Annan said, “The International Year of Microcredit 2005 underscores the importance of microfinance as an integral part of our collective effort to meet the Millennium Development Goals. Sustainable access to microfinance helps alleviate poverty by generating income, creating jobs, allowing children to go to school, enabling families to obtain health care, and empowering people to make the choices that best serve their needs. The stark reality is that most poor people in the world still lack access to sustainable financial services, whether it is savings, credit or insurance. The great challenge before us is to address the constraints that exclude people from full participation in the financial sector. The International Year of Microcredit offers a pivotal opportunity for the international community to engage in a shared commitment to meet this challenge. Together, we can and must build inclusive financial sectors that help people improve their lives.”
The resolution designates the United Nations Capital Development Fund (UNCDF) and the United Nations Department of Economic and Social Affairs (DESA) as focal points to coordinate the activities of the United Nations system during preparations for and observance of the International Year of Microcredit, 2005.
Recent studies show that the number of poor people worldwide who benefited from microcredit more than quadrupled between 1997 and 2001. With demand for financial services growing rapidly, the Year of Microcredit will highlight ways to expand the reach of financial services on a sustainable basis.
“We are extremely pleased to have the opportunity to coordinate the Year of Microcredit with DESA. The demand for microfinance services is still largely unmet, however, the Year provides an unprecedented platform to focus on improving the capacity of financial institutions and to implement effective national strategies that address this unmet demand,” said Normand Lauzon, Executive Secretary of the UNCDF.
According to the Programme of Action, the United Nations will join together with Member States, non-governmental organizations, the private sector and civil society to raise public awareness, build sustainability in the microcredit and microfinance sectors, and promote innovative partnerships. Although microcredit and microfinance have already had a positive impact on the household budgets and quality of life of millions of poor people, many are still denied access to financial services that could raise their standards of living and protect them against economic setbacks. The Programme of Action recognizes that a range of financial products and services can enhance the poor’s ability to increase their incomes, build assets and mitigate their vulnerability in times of economic stress. The International Year of Microcredit, 2005 will encourage and support the growth of microcredit and microfinance sectors to best serve the needs of a wide variety of poor clients.
The impact of a more inclusive financial service sector is not limited merely to the receipt of loans, credit, savings, insurance, and other economic tools, but evidence shows that it contributes to the health, nutrition, food supply and educational level of recipients’ families making them less susceptible to unanticipated income fluctuations. Microcredit and microfinance programs not only elevate personal assets, but go beyond the individual household level to help strengthen the fabric of local economies by investing in the productive capacity of communities, stimulating consumer activity and creating new jobs.
“Microfinance is much more than simply an income generation tool," said Mark Malloch Brown, Administrator of the United Nations Development Programme (UNDP). "By directly empowering poor people, particularly women, it has become one of the key driving mechanisms towards meeting the Millennium Development Goals, specifically the overarching target of halving extreme poverty and hunger by 2015.”
The Programme of Action was prepared based on input from Member States as well as from United Nations technical agencies and encompasses a wide array of vantage points. It also takes into account the conclusions and recommendations from recent major United Nations conferences and summits related to the financial sector and development. Activities for the Year will be undertaken at the national, regional and international levels.
For additional information on the Year of Microcredit 2005, please contact Emily Krasnor at UNCDF, tel: (212) 906-6308, e-mail: email@example.com; Sarangerel Erdembileg at DESA, tel: (212) 963-4720, e-mail: firstname.lastname@example.org; or Vivienne Heston-Demirel in the United Nations Department of Public Information, tel: (212) 963-2932, e-mail: email@example.com.
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