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African Countries Focus on Microfinance: Twelve African Nations Engaged in the International Year of Microcredit to Date

Guest post by: United Nations Capital Development Fund

Article Overview: Half of the population in Africa lives on less than one dollar a day. More than half the population has no access to safe drinking water. More than two million infants die annually before reaching their first birthday.[1] Such is the harsh reality of the scale of poverty in Africa. The Millennium Development Goals and the objective to halve the proportion of people living in extreme poverty by 2015 has driven a number of regional and national initiatives focused on poverty eradication in Africa based on local needs and priorities.

African Countries Focus on Microfinance: Twelve African Nations Engaged in the International Year of Microcredit to Date

By Tanya Lobel, Stern School of Business, New York University



Half of the population in Africa lives on less than one dollar a day. More than half the population has no access to safe drinking water. More than two million infants die annually before reaching their first birthday.[1] Such is the harsh reality of the scale of poverty in Africa. The Millennium Development Goals and the objective to halve the proportion of people living in extreme poverty by 2015 has driven a number of regional and national initiatives focused on poverty eradication in Africa based on local needs and priorities.

Microfinance and social entrepreneurship can dramatically change the lives of poor people in Africa. The operations of microfinance institutions have grown significantly over the past decade in Africa and the International Year of Microcredit has tapped into the growing movement to build inclusive financial sectors throughout the developing world as a lasting poverty eradication strategy.

National Committees for the International Year of Microcredit have been established throughout the African continent to lead both countrywide and regional activities. The National Committees are central to the success of the Year and the future of microfinance because they aim to engage country-level microfinance clients, local governments, Central Banks, UN Country Teams, private sector leaders and the NGO community to work towards improving the life of low-income entrepreneurs. The International Year of Microcredit is just a starting point to engage countries to start building inclusive financial systems and National Committees are a platform to create permanent task forces to ensure that an active commitment to microfinance transcends 2005.

To date, nine African countries have established working National Committees and three African countries are in the process of setting up their National Committees. These committees are committed to achieving the vision of the International Year and ensuring that by 2015, 50% of all households within the region will have access to quality financial services.

The National Committees within each country have the flexibility to decide how best to focus their efforts. Conferences have been organized throughout the region as a means to educating a larger audience about microfinance. These events bring together key microfinance practitioners in the region and provide a platform for them to exchange ideas and learn from each others' experiences.

The Inter-African Forum on Microenterprises will take place this November in conjunction with the International Day for the Eradication of Poverty. The forum will provide a tremendous opportunity to promote microfinance as a highly effective tool in the collective effort to alleviate poverty and foster entrepreneurship in Africa. The forum will focus on the perspective and results of the International Year of Microcredit. The meeting will bring together the Year's National Committees from the region and provide a platform to network and exchange ideas, innovations and successes in the various countries' microfinance initiatives during the International Year of Microcredit. The focus will be to discuss continuing barriers faced in extending financial services to poor people in Africa.

Morocco is organizing a number of conferences this year, and earlier this month held a forum entitled "Microfinance and Enterprise Creations", looking at experiences in France, Tunisia and Eastern Europe. This May, Morocco will hold another seminar entitled "The Rate of Interest and Microfinance".

Malawi will also be holding a national conference within the next few months on microfinance. Benin will also hold a one-week microfinance conference this month. Mauritania has organized a National Forum on the challenges facing microcredit and a two day event at end of caravan entitled "Open door to microfinance" with exhibitions, conferences, debates, and the distribution of awards by the President of Mauritania. A conference was also held in Gabon late last year entitled 'Microfinance Impact in the Fulfillment of MDGs in Gabon'.

African countries have also concentrated on using the media as a means for promoting the Year. Benin's National Committee plans to execute a public relations campaign that will include five radio pieces and a National Press Conference. The Kenyan National Committee will publicize the work of microfinance institutions as newspaper supplements in 'The Nation' and 'The Standard'.

Some countries will also focus on local activities to promote microfinance in the areas that it is most needed. The Kenyan National Committee is organizing parades, exhibits, awards ceremonies and educational discussions within eight provinces to promote knowledge of microfinance at the local level. In South Africa, competitions, conferences and exhibitions are being organizing throughout the country.

Africa has the potential for significant growth and development of the microfinance sector. The success of the Year and the establishment of committed National Committees bodes well for the continued focus on Microcredit going forward.

Related Articles
  III. BACKGROUND - Microfinance in Africa
  IV Module I Key Principles for an African Model of Microfinance
  II. How Can MicroFinance Succeed In Africa?
  4.0 The Role of Governments: Microfinance in Africa - Experience and Lessons from Selected African Countries
  New Partnership for Africa’s Development

Article Tags: african continent, central banks, dollar a day, extreme poverty, financial sectors, international year of microcredit, microfinance institutions, millennium development goals, national committees, national initiatives, new york university, ngo community, poor people in africa, poverty eradication, poverty in africa, private sector leaders, regional activities, safe drinking water, social entrepreneurship, stern school of business



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