MP for the Cities of London and Westminster Mark Field led a parliamentary debate on microfinance yesterday in Westminster Hall. This is the first time in four years that a debate focused specifically on microfinance had taken place in the UK Parliament.
Mark Field, a member of the All-Party Parliamentary Group on Microfinance – whose Secretariat is hosted by RESULTS UK – mentioned the influence of his exchanges with Louise Holly, RESULTS UK’s Deputy Director and one of Mark’s constituents, in raising his awareness on microfinance and getting him more involved in the issue.
He argued that poverty is most extreme in areas that are excluded from the financial system. “Microfinance,” he stated,
“can help poor people to protect themselves from risk, to escape debt and to live sustainably by creating small enterprises. It is not and cannot be a cure-all. It has not even proved sustainable or effective in all the communities in which it has been used. However, as a development technique that encourages responsibility and independence, microfinance is a form of assistance that is more likely to garner the support of the British taxpayer, especially, as I said, if it is put to work in some of the UK’s own poorest communities.”
Also participating in the debate were Gareth Thomas, Minister of State for International Development, and Andrew Mitchell, Shadow Secretary of State for International Development, as well as Annette Brooke, Chair of the APPG on Microfinance, and Michael Moore, Liberal Democrat Spokesman for International Development. All of them emphasised the role that microfinance should continue to play in development programmes, and the benefits that ensue from microfinance in terms of poverty alleviation, but also in terms of gender empowerment and, more broadly, achieving the Millennium Development Goals.
Similarly, contributors all stressed the urgent and critical challenge of scaling up access to microfinance, mentioning the fact that almost 3 billion people worldwide still remained unbanked and without any access to formal financial services. In Africa, only one in five people use the formal banking sector.
Noticeably, contributors evoked two major issues which RESULTS UK has long been advocating for, the first one being the need to avoid losing sight of the social mission of microfinance and to subsequently include specific and precise social impact goals into any kind of microfinance initiative which, as Annette Brooke stressed it, should apply to the future Multi-Donor Facility currently being designed by the DFID and intended to deliver capacity building support to microfinance providers in sub-Saharan Africa (see previous post).
Secondly, the subject of microinsurance was brought up by several participants and quite extensively by Annette Brooke whose position on the issue stands in line with RESULTS’ expressed recommendations (see previous post). DFID Minister Gareth Thomas agreed that microinsurance had a role to play in “helping the world’s poorest to be better able to withstand the rising impact of climate change globally” and said that this is an area that DFID is working on. Annette Brooke raised the need to set up an international fund that would provide support to microinsurance programmes worldwide.
RESULTS UK was acknowledged by all of the main contributing MPs as a prominent actor on the microfinance scene and we were praised for our role in raising the profile of microfinance in Parliament: Andrew Mitchell described us as “a brilliant organisation” and Gareth Thomas recognised the “excellent job” the RESULTS network has done over the years.