Why does the Microcredit Summit Campaign wholeheartedly support the goal of “Finance for All by 2020?” Because we see it as an important step in reaching the larger goal of ending extreme poverty by 2030.

From October 9 to 11 we held the Microcredit Summit in Manila on the theme “Partnerships against Poverty.” Delegates of the Summit drafted and approved the Partnerships against Poverty Summit Declaration, listing the principles that we will follow to insure that microfinance works as a worthy partner in the movement to end extreme poverty. The opening commitment of the declaration states:

First, we commit to putting the extreme poor first. Their voices must be heard in our movement, and they must be full participants in the process of improving their lives and our services. They are not only our clients, but also our biggest resource.

To better reach and serve the poorest and most vulnerable populations, we will ensure that we include women, children, the elderly, the disabled, refugees, the LGBT communities and members of cultural and religious minorities.   

Achieving “Finance for All” means that we must develop financial products and services that meet the needs of the poorest and most vulnerable populations. The organizations partnering with the Microcredit Summit Campaign have committed themselves to work with governments, mobile network operators, payment providers, and others to help design and test these products.

When we develop products that meet the needs and the aspirations of those in extreme poverty at price points they can afford, then we will have improved the efficiency of the overall financial system and begun to put in place the mechanisms for achieving Finance for All.

Sendhil Mullainathan, professor of economics at Harvard University, clearly explained the need for putting the needs of the extreme poor first when he spoke at the FI2020 Global Forum. Scarcity brings increased focus, but it leads to tunneling, over borrowing, and limited bandwidth. The financial products we provide for those living with extreme scarcity can either help them escape the scarcity trap or ensnare them deeper in it.

We pledge to work with the FI2020 movement to help design, test, and scale up products and services that both reach those living in poverty and facilitate their journey out of poverty.

Image credit: The Center for Financial Inclusion

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Microfinance CEOs Make Six Major Commitments at 2013 Partnerships Against Poverty Summit

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The CEOs of eight leading global microfinance networks – Accion, FINCA, Freedom from Hunger, Grameen Foundation, Opportunity International, Pro Mujer, VisionFund International, and Women’s World Banking – made six significant commitments at the Microcredit Summit Campaign’s Partnerships Against Poverty Summit last week in Manila. These eight CEOs make up the Microfinance CEO Working Group. Together they represent more than 250 retail microfinance institutions in 70 countries globally and provide financial and often non-financial services to more than 40 million families.

Here are the commitments:

1. Client Protection: Encourage all affiliates to progress toward Smart Campaign certification and be on a pathway toward certification by the end of 2014.

2. Pricing Transparency: Motivate our affiliates to commit to pricing transparency and integrity by agreeing to publish their pricing data using standard methodologies, such as those developed by MicroFinance Transparency, in order to allow investors and clients to make informed decisions.

3. Social Performance: Promote the Social Performance Task Force’s Universal Standards for Social Performance Management among our affiliates and commit to supporting their compliance.

4. Outcomes: Share the research we each have done on outcomes with one another and with the industry and encourage our affiliates to report outcomes relevant to their goals and objectives.

5. Global Appeal: Encourage our affiliates to sign the Global Appeal for Responsible Microfinance as an outward symbol of their commitment to the principles embodied in the above initiatives.

6. Investors: Encourage our affiliates’ equity/debt investors to promote the same five initiatives.

In addition, the CEOs committed to reaching out within the next six months to all 250 of their affiliates to encourage each of them to join in helping to meet these commitments.

Imagine the impact this could have on the microfinance sector worldwide!

For more on the Microfinance CEO Working Group, a collaborative effort to support the positive development of the microfinance industry, click here.

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