The August action pack is now available on the RESULTS UK website. Our monthly conference call, which this month is looking at microfinance in Africa, will be held on Tuesday 3rd August at 8pm. To join in contact the RESULTS office.
Microfinance, the provision of small-scale financial services for the poor, has been an effective tool in the fight against global poverty. Studies have shown that microfinance has helped improve quality of life, education and health of communities. For an analysis of the evidence on how microfinance contributes to achieving the Millennium Development Goals you can see this month’s background materials. Yet while there are many microfinance organisations in Africa, levels of access to financial services for poor people remain very low.
In response to sustained pressure from civil society to support microfinance, the UK Department for International Development and the World Bank are collaborating to establish a new ‘Capacity-Building Fund for Microfinance in Africa.’ The fund is intended to increase the number of microfinance institutions in Africa and to support existing institutions. However, there are major concerns with the direction the process has taken so far.
For microfinance to fully realise its potential to fight poverty, microfinance institutions and their donors must adopt clear goals to reduce poverty and a strategy that measures progress towards achieving these. The new Capacity-Building Fund is a vital step towards ensuring the microfinance sector can reach its potential and can help the estimated 230 million Africans who currently have no access to financial services, but it must support microfinance organisations that operate in this strategic way to have the biggest impact on poverty possible.
For this month’s action, we are asking you to write directly to your MP to ask them to help ensure the Capacity-Building Fund is as effective as possible at reaching the poor and improving their chances of escaping poverty. We will also ask MPs to recommend the UK and the World Bank allocate at least $200 million (the amount requested in ongoing communications between the US Senate and the World Bank) to the Fund to enable it to be effective.
Our guest speaker on the conference call will be Alexia Latortue, acting CEO of the Consultative Group to Assist the Poor (CGAP). CGAP is a leading research and advocacy organisation working on microfinance, which has been involved as a peer reviewer in the creation of the concept note on the Capacity-Building Fund. Alexia has worked on improving the effectiveness of funding for microfinance and has provided strategic and technical services to development agencies. She has also written extensively on aid effectiveness in microfinance.