“The poor themselves can create a poverty-free world …. all we have to do is to free them from the chains that we have put around them.” – Muhammad Yunus, Nobel Peace Laureate and founder of the Grameen Bank
It is estimated that 2.5 billion people are still unable to obtain financial services.
This adds to the vulnerability of poor people as it prevents them from starting or growing small enterprises, obtain insurance or have a safe place for savings.
There is wide support for microfinance. For instance, the World Bank President Jim Kim has endorsed the goal of universal financial services access by 2020, and in 2010 the Australian Government announced its financial inclusion strategy ‘Financial Services for the Poor’.
RESULTS has been a strong supporter of the Microcredit Summit Campaign since its launch in 1997. The original goal of the campaign was to reach 100 million of the world’s poorest families – those living on less than $US 1.25 per person per day – with credit and other financial services by 2005. In 2006, the Campaign took on two new goals for 2015:
- Reaching 175 million of the poorest families with microfinance.
- Helping 100 million families lift themselves out of extreme poverty.
The number of the poorest people accessing credit and financial services grew rapidly from 8 million people in 1997 to 138 million in 2010. But since then the number of very poor borrowers has declined to 116 million in 2012.
Increased Australian support for access to financial services will reduce the vulnerability of the poorest people and ultimately increase self-reliance as people are able to generate a higher income from small enterprises and insure against loss of income.
Women make up the largest number of microfinance clients. So expanding access to financial services is a great tool for gender equality and this is also also consistent with the goal of empowering women set out in the Australian Government’s aid policy.
Photo credit: BRAC