Posted by: APO | 21 April 2008

Africa’s poor / Gordon Brown announces plans to unlock the power of financial services for Africa’s poor

 

Gordon Brown announces plans to unlock the power of financial services for Africa’s poor

 

Prime Minister Gordon Brown today announced plans for the Department for International Development (DFID) to work with the Grameen Group and private sector partners to help Africa’s poorest citizens access to and unlock the power of financial services.

 

DFID will help ensure more people in developing countries have the necessary skills to make microfinance schemes work successfully. Initial funding of £500,000, to be matched by private sector funding, will kick-start the scheme.

 

Following a meeting with Nobel Prize Winner and founder of the Grameen Group Muhammad Yunus, Gordon Brown said:

 

“With foreign investment into microfinance across the globe tripling to $4 billion between 2004 and 2006, the impact of microfinance is being felt all over the world. There is an urgent need to improve business and management skills in the microfinance industry in Africa to make sure this money is used to help people from the world’s poorest communities.”

 

Microfinance provides financial services including deposit accounts, insurance and, importantly, small unsecured loans to poor people. Following the pioneering work of the Grameen Bank in Bangladesh, which gave small loans to develop local businesses such as weaving and woodwork, it is widely recognised as an effective method of reducing poverty and dependency on aid.

 

Gordon Brown continued:

 

“As a first step we will provide £500,000 towards bridging the skills gap in the microfinance industry in Africa, which will be more than matched by the private sector. We will bring together civil society organisations, and the private sector to contribute the funding, knowledge and skills required to bring microfinance to those who need it most”.

 

DFID contributes £30 million every year to improve transparency and support the development of strong financial sectors that are able to contribute to growth and poverty reduction.

 

ENDS

 

Notes to editors:

 

1.      2 billion people worldwide have no access to basic financial services, which included bank accounts, insurance and pension schemes as well as loans.

2.      The Grameen Bank has reversed conventional banking practice by removing the need for collateral and created a banking system based on mutual trust, accountability, participation and creativity.

3.      As of March, 2008, the Grameen Bank has 7.46 million borrowers, 97 percent of whom are women. With 2,504 branches, Grameen Bank provides services in 81,574 villages, covering more than 97 percent of the total villages in Bangladesh.

4.      Grameen Bank’s positive impact on its poor and formerly poor borrowers has been documented in many independent studies carried out by external agencies including the World Bank, the International Food Research Policy Institute (IFPRI) and the Bangladesh Institute of Development Studies (BIDS).


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