Commercializing Microfinance is Key to Expanding the Industry, Regional Conference Told
MANILA, PHILIPPINES (15 March 2005) - The commercialization of microfinance is key to expanding the industry and helping millions of poor and low-income people help themselves rise above poverty.
This was the message of the opening session yesterday of the ADB-hosted regional conference on "Expanding the Frontiers of Commercial Microfinance," being held at ADB's headquarters in
The two-day conference opens a weeklong series of events organized by ADB as part of global efforts to promote sustainable, commercial microfinance, and to contribute to the celebration of 2005 as the International Year of Microcredit.
"Microfinance is a powerful tool in the fight against poverty. Greater access to financial services has brought significant economic benefits to millions of poor and low-income people here, and around the world," ADB President Haruhiko Kuroda said in his welcome remarks to the conference.
"But millions more remain unserved or underserved. Until their needs are addressed, they will have little hope of helping themselves rise above poverty and contribute to their own economic and social well-being, and that of their families and communities."
He said that making financial systems more competitive will be key to expanding the industry while ensuring better quality services at a reasonable cost.
ADB Vice-President Geert van der Linden, in his opening remarks, also emphasized that, "given the large and growing demand, the only way to sufficiently increase the supply of microfinance is through commercialization."
He cited establishing a climate conducive to commercialization, attracting private sector investment, and putting microfinance institutions on a more stable footing as key challenges that need to be addressed.
While the solutions are not simple, he suggested making financial systems more competitive, for governments to develop sound policies and legal frameworks, for donors to support governments toward this end and to discourage inappropriate government interventions, and for alternative financial institutions to transform themselves into dynamic service providers through reforms.
"A financial system that serves only a minority of the country's people is unacceptable," he added. "Inclusive financial systems that provide access for the majority should be made a central goal of every developing country."
The conference brings together policymakers, microfinance service providers and academics from about 20 countries to discuss issues such as the future of commercial microfinance in
It will also explore whether alternative financial institutions, such as rural development banks, postal savings banks, and national savings banks have a meaningful role to play in microfinance.
Marguerite Robinson, author of the seminal book The Microfinance Revolution, gave a keynote speech on the future of the commercial microfinance industry in Asia, and Stuart Rutherford, the founder of SafeSave in
The governor of the central bank of
The two-day conference, which ends today, will be followed by a one-day regional consultation meeting on "Building Inclusive Financial Sectors for Development," organized in coordination with the United Nations Capital Development Fund and the Financing for Development Office of the United Nations Department of Economics and Social Affairs.
A training workshop on the role of governments in microfinance for staff of funding agencies will be held on Thursday, 17 March, in cooperation with the Consultative Group to Assist the Poor, and the week will close with a national forum on housing microfinance in the
ADB has supported the microfinance industry in the region since 1988 through loans, grants, and policy advice. In 2000, ADB formulated a Microfinance Development Strategy to further strengthen its assistance to the sector.
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