Record 128 Million of World's Poorest Received a Microloan in 2009

Mar 07, 2011, 12:44 ET from Microcredit Summit Campaign, A Project of Results Educational Fund

WASHINGTON, March 7, 2011 /PRNewswire-USNewswire/ -- More than 128 million of the world's poorest families received a microloan in 2009—an all-time high, according to a report released today by the Microcredit Summit Campaign. Assuming an average of five persons per family, this means that loans to 128 million poorest clients affected some 641 million family members, which is greater than the combined population of the European Union and Russia. Microloans are used to help people living in poverty start or expand a range of small businesses, such as selling basic staples, producing handicrafts, and delivering cell phone services to remote villages.

Nobel Peace Prize Laureate Muhammad Yunus participated in the news conference by video link from Dhaka, Bangladesh.  He is featured in the report in box on social business.

"Microcredit has very effectively lifted millions of poor women and their families out of poverty," said U.S. Ambassador-at-Large for Global Women's Issues Melanne Verveer. "With the 100th anniversary of International Women's Day being celebrated on March 8th, it is gratifying to see that over 81 percent of the very poor who received microloans were women – that is more than 100 million people. Women entrepreneurs are one of the smartest investments in microfinance. Not only have they shown strong returns in the success of their businesses, but they consistently have demonstrated high loan repayment rates and they re-invest in their families and their communities."

Overall, more than 190 million people had a microloan in 2009; however, the Campaign focuses on the 128 million poorest. In the 12 years since the Campaign's founding, the number of very poor families with a microloan has grown more than 16-fold from 7.6 million in 1997 to 128 million in 2009. The report includes data from over 3,500 institutions with more than 93 percent of the information collected last year and verified by a third party.

"I have joined you from Spain to demonstrate my government's strong commitment to microfinance programs that help people work their way out of poverty, ensuring both financial and social inclusion," said Spanish Secretary of State for International Cooperation Soraya Rodriguez Ramos.  "The Spanish government is pleased to be hosting the Global Microcredit Summit in Valladolid, Spain in November of this year, providing an opportunity for all 2,000 delegates to share their innovations, forge solutions to the challenges, and deepen their commitment to this very critical work."

The State of the Microcredit Summit Campaign Report 2011 also announced the development of a Seal of Excellence for Poverty Outreach and Transformation in Microfinance which has been under discussion for 11 months and will continue to evolve throughout this year and beyond with input from a broad range of stakeholders.  The Seal will recognize those institutions doing the most to help families lift themselves out of poverty.  Acknowledging the range of critical initiatives in the microfinance field, Campaign Director Sam Daley-Harris said, "The Seal is working to build on the Smart Campaign's client protection principles and the work of the Social Performance Task Force and is discussing ways to implement the seal that would use the systems that have already been developed for understanding the social performance of microfinance institutions."  The draft concept note and a request for feedback can be found here:  http://www.microcreditsummit.org.   

Nobel Peace Prize Laureate and Microcredit Summit Campaign co-founder Professor Muhammad Yunus hopes that microfinance institutions will remain committed to their mission of helping the poor by charging low interest rates and that appropriate laws will be adopted for MFIs to access local deposits and to be able to lend out those deposits rather than seeking loan funds from commercial investors. In the report, Professor Yunus focuses on a new category of business named social business.  This is a non-loss, non-dividend company dedicated to solving social or economic problems. With Danone, the French yogurt maker, Grameen companies have launched one such business to address child malnutrition in Bangladesh, producing a very low-cost yogurt that contains all the micro-nutrients that children are missing. With Adidas, the German shoe manufacturer, Grameen has initiated another social business that will provide shoes for less than US$1.50 per pair to poor people in Bangladesh.

"This will have an enormous impact on health," said Prof. Yunus, "because poor people suffer from diseases like hookworm that come through the skin of their feet. We want to make low-cost shoes that children and adults can afford to wear all the time."

The Microcredit Summit Campaign aims to reach 175 million of the world's poorest families by 2015 and ensure that 100 million of those families move above the World Bank's $1.25-a-day poverty threshold.

For a copy of the full news release go here: http://www.microcreditsummit.org/news

To download the Report online: http://www.microcreditsummit.org/SOCR_2011_EN_EMBARGOED.pdf

Microcredit Summit Campaign:

The Microcredit Summit Campaign is a project of RESULTS Educational Fund, a U.S.-based advocacy organization committed to creating the will to eliminate poverty. The Campaign was launched in 1997 and in 2007 surpassed its original goal of reaching 100 million poorest families with credit for self-employment and other financial and business services. The next Global Microcredit Summit will be held November 14-17, 2011 in Valladolid, Spain. www.microcreditsummit.org

SOURCE Microcredit Summit Campaign, A Project of Results Educational Fund



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