Re-invent global finance to end poverty, says leading microcredit economist

Re-invent global finance to end poverty, says leading microcredit economist

By Ecumenical News International
13 Apr 2010

The Bangladeshi economist who won the Nobel Peace Prize in 2006 for championing microcredit loans to the poor, has called for an urgent re-invention of global financial systems to end poverty and protect the underprivileged - writes Fredrick Nzwili.

Muhammad Yunus said in Nairobi, Kenya, last week that a new system could allow those excluded from mainstream banking, especially in Africa and the Middle East, to access credit that would enable them to live in dignity.

"We are not just happy to make ourselves rich and wealthy. We also want to make sure our fellow human beings can stand on their feet with pride and dignity, no matter where they live," Yunus said at the opening of the four-day Africa–Middle East Microcredit Summit in the Kenyan capital.

Around 1500 delegates from 75 countries, including representatives of Christian-based microcredit organisations, such as the Ecumenical Church Loan Fund, are attending the meeting.

Yunus told the gathering that the world must abandon systems that do not work, and noted that microfinance had provided good lessons in how the lives of the poor could be changed. He said that if lending to the poor was brought to the level of other financial products, more people would escape poverty.

"It is the time we made possible what has been thought of as impossible," said the 70-year-old, who has been dubbed the, "banker to the poor".

Yunus began his microcredit initiative 30 years ago with a US$27 loan to a group of women in Chittagong. Since then, the movement has grown widely and delivered millions of small loans to poor people with no access to mainstream banking services.

"Our journey will never end until we reach our destination. That destination is the end of poverty," he told the meeting, which ended on 10 April.

At the beginning of the conference, Kenya's President, Mwai Kibaki, said the global financial crisis had more than halved Africa's economic growth from 5.7 per cent in 2008 to 2.4 per cent in 2009.

African microfinance organisations, including church-based ones, said they hoped to learn from the success and growth of similar institutions in Asia, where more than 150 million people benefit from microfinance.

"We believe in microcredit. We have joined others to showcase what we have to offer in this part of the world, where people are known to depend on handouts. We want to say we can make it on our own in this part of the world. We want to say we can make a difference," Rose Wanjohi, chief executive of Kenya ECLOF, told Ecumenical News International.

In 2006, microcredit groups said that by 2015 they aimed to reach 175 million of the world's poorest families in order to offer them credit facilities and other financial services for businesses and self-employment.

[With acknowledgements to ENI. Ecumenical News International is jointly sponsored by the World Council of Churches, the Lutheran World Federation, the World Alliance of Reformed Churches and the Conference of European Churches.]

[Ekk/3]

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