Following our August action on Microfinance in Africa, members of the RESULTS network have been sharing letters that they have received from DFID Minister Stephen O’Brien. The responses so far have been very positive and provide quite detailed answers to all of the questions posed about the new Capacity Building Facility for Microfinance in Africa which DFID is developing in partnership with the World Bank.
RESULTS activists wrote to their MPs to ask them to help ensure the Capacity-Building Facility is as effective as possible at reaching the poor and improving their chances of escaping poverty. They asked their MPs to forward some specific requests – which included asking that the Facility is designed with a strong poverty-focus and incorporates social performance indicators and monitoring of its impact on poverty alleviation – to the Secretary of State for International Development as well as the President of the World Bank.
So far, members of the Linlithgow and London groups have received letters from Stephen O’Brien via their MPs. The key points raised by the Minister are detailed below. One important thing to note is that the Facility is still being developed so there is still time for you to write a letter to your MP if there are additional points you would like to raise.
- Stephen O’Brien agreed that financial services help the poor to reduce vulnerability to shocks, build assets and link into the wider community as full economic citizens. He said he believes that microfinance should be about more than just access to credit and should help poor people to access a wider range of financial services as well.
- Microfinance continues to play an important role in enabling un-banked poor people, particularly women, to receive financial services for the first time and can therefore have a significant impact on the lives of the poor.
- In response to our request that the Facility should have a strong focus on poverty reduction, Stephen O’Brien confirmed that the objective of the Facility is to build the capacity of microfinance providers to enable them to reach millions of un-banked poor people throughout sub-Saharan Africa on a sustainable basis.
- He said that we need to create strong and sustainable institutions that can service traditionally un-served markets by developing and delivering more appropriate products.
- The Facility will implement its objectives by working with a variety of partners including Microfinance Institutions (MFIs) and informal community-based schemes.
- DFID and the World Bank are seeking to move the process forward as quickly as possible and hope that the Facility will be launched in early 2011.
- In response to requests that the Facility should incorporate social performance indicators and monitor its impact on poverty alleviation, Stephen O’Brien said he strongly agreed and ‘would ensure that such indicators are in place to support the robust monitoring and evaluation of both the economic and social impact of the Facility.’
This is a great outcome from our action – particularly seeing such strong support from a Minister for incorporating social performance indicators into the design of the Fund – so congratulations to everyone who took the time to write to their MP. Not only have we been able to educate our MPs about the positive impact of microfinance but we have received strong reassurances from DFID that this new Capacity Building Facility will have a strong poverty focus. Hopefully, we will receive the same messages from the World Bank too!