International Year of Microcredit 2005

What are the United Nations, Multi-lateral Financial Institutions and Regional Commissions Doing to Observe the Year of Microcredit 2005?
UN organizations and commissions are celebrating and promoting the Year of Microcredit in diverse and exciting ways. Read on to learn about some of these innovative plans.

	United Nations Secretariat
	Regional Commissions
	Organizations of the United Nations System
	Multi-lateral financial institutions


	United Nations Secretariat
In addition to its activities as Joint Coordinator of the Year, the UN Department of Economic and Social Affairs is planning several events in 2005: an expert group meeting and a youth roundtable on "Microcredit/Microfinance and poverty reduction" in June 2005, in collaboration with the Youth Employment Network, the Economic and Social Commission for Asia and the Pacific (ESCAP) and other partners. An event highlighting the role of cooperatives in promoting microcredit for poverty reduction will mark the International Day of Cooperatives on 2 July 2005; and an event highlighting the contribution of microcredit to poverty eradication to mark the International Day for the Eradication of Poverty on 17 October 2005.

As follow-up to and implementation of the outcome of the International Conference on Financing and Development, the Financing for Development Office of DESA is organizing several multi-stakeholder consultations on "Building an inclusive financial sector for development" which will contribute to the development of the "Blue Book".

The United Nations Office of the Special Adviser on Africa (OSAA) emphasizes that microfinance be conceived not only as a tool for the eradication of poverty, but also in the wider context of other societal problems. In some situations, microfinance should therefore contain health-habit changing educational components with an emphasis on HIV, especially in Africa, and it must be designed to create employment for youth, not only for economic empowerment but also for conflict prevention.


	Regional Commissions
The Economic Commission for Africa (ECA) plans to undertake a review and analysis of microcredit and microcredit institutions in Africa. The analysis will highlight good practices and identify opportunities and obstacles these institutions face in reaching the Millennium Development Goals. ECA also envisages the proclamation of a Microcredit and Microfinance Day in 2005, possibly in collaboration with the African Union, where the above study can be presented and widely disseminated.

The Economic and Social Commission for Asia and the Pacific (ESCAP) plans to incorporate the topic of microcredit into a study entitled "Implementing the Monterrey Consensus in the Asia-Pacific region: achieving coherence and consistency" for the sixty-first session of the Commission in 2005. ESCAP is also exploring the possibility of holding an event during one of the Intergovernmental Thematic Committee with the involvement of civil society.

The Economic and Social Commission for Western Asia (ESCWA) has issued a number of publications on the role of microcredit in poverty alleviation and the targeting of poor women in urban and rural areas in selected Arab countries. ESCWA also implements microcredit schemes for capacity-building of local communities and intends to continue these projects.

Organizations of the United Nations System

www.undp.org/europeandcis

The Food and Agricultural Organization (FAO) will focus on the importance of microfinance in support of agricultural and rural development, and through the network of Regional Agricultural and Rural Credit Associations, will support regional workshops on good rural finance practices. Attention will be given to widely disseminating the Rural Finance Learning Centre, a new Internet based resources centre, being developed by FAO jointly with a number of international partners and aimed at contributing to the development of sustainable financial services in rural areas. FAO also proposes to promote good banking practices in rural areas and improved mechanisms for small-scale-farmers through preparing a set of guidance notes on finance and farmers. In addition, a major focus will be given to analyzing an emerging trend of linkages between the formal financial sector and rural and microfinance institutions. In 2005, the World Food day will adopt the theme "Rural credit for food security".

The International Fund for Agricultural Development (IFAD) will officially launch the Year with a pre-launch event in Rome on 15 November 2004 and a one-day event at the Stock Exchange in Milan, on 18 November, 2004, in partnership with the Italian rating agency, Microfinanza. These events are intended to sensitize governments, donors and microfinance practitioners on the growing role of commercial banks in microfinance, helping to disseminate lessons from the field. IFAD also plans to support the harmonization of reporting requirements in partnership with the Microfinance Information eXchange to increase access to this web-based reporting system for its rural finance partners. IFAD will share with donors and practitioners the outcomes of its research agenda on agriculture microfinance that was developed jointly with CGAP. In addition, IFAD plans to support the FAO programme Capacity Building Initiative in Rural Finance (CABFIN) and to disseminate donor best-practices by developing a series of operational tools on key issues related to microfinance. Finally, IFAD plans to implement a communications programme that will include media relations, advocacy and other initiatives in support of the Year.

The International Labour Organisation (ILO) has pointed out that it looks at finance from a social viewpoint, attaching equal weight to the functioning and performance of financial systems, as it does to the effects on workers, entrepreneurs and the poor. While advocating for an inclusive financial sector, the ILO focuses on the limited absorptive capacity for many poor households for credit and the risks of debt; the use of debt bondage in many parts of the world; the social impact of financial sector liberalization; and gender bias with respect to access to the financial market. In response to these challenges, the ILO promotes equity in the access to markets and assets and examines the links between the capital market and labour markets, and the effects of financial sector policies on employment and poverty.

The United Nations Capital Development Fund (UNCDF), as the policy advisory and technical assistance center for microfinance of the United Nations Development Programme Group (UNDP), was requested by the United Nations Department of Economic and Social Affairs (UNDESA) to develop, with inputs from Member States, UN agencies and other stakeholders, the programme of action for the Year. UNCDF also hosts the Secretariat, which is responsible for the operational management of coordinating the Year.

At its quadrennial conference in June 2004, the United Nations Conference on Trade and Development (UNCTAD) held an International Forum on E-Commerce and E-Finance for small and medium-sized enterprises (SMEs) to analyze emerging techniques and modalities in the area of e-finance and address appropriate frameworks for developing new online solutions for credit information and risk management in order to ensure better access by SMEs to trade finance and e-finance. UNCTAD also envisages launching a public and private partnership in this field involving financial services providers, enterprises, public authorities, and regional and international development organizations.

The United Nations Development Programme (UNDP) will highlight the Year on its website and disseminate information on the Year through appropriate channels. Country office staff will be encouraged to engage with National Committees for the Year and the relevant UNDP staff is encouraged to share experience on how to successfully build inclusive financial sectors, and to lend input and experience to knowledge networks, discussion groups, forums and think tanks. In addition, UNDP has agreed to a thorough review of its microfinance portfolio by CGAP which, with support from UNCDF and UNDP, will implement a programme-country wide survey on the status of UNDP microfinance initiatives.

The United Nations Industrial Development Organization (UNIDO) is working on the initiative "Financial services for small enterprises" to provide technical assistance in support of access to credit for small enterprises. As part of this initiative, a project on SME development through establishment of mutual credit guarantee schemes in selected countries has been prepared. Another programme on "Migration and development" promotes SMEs and other forms of entrepreneurial cooperation targeting migration, rural development and transfer of technology as well as developing a financial strategy to help new investors benefit from different financial alternatives such as microcredit and mortgage loans.

The United Nations Population Fund (UNFPA) intends to implement a project together with other partners on the "Contribution of microfinance to women's empowerment and health". The overall purpose is to provide microfinance institutions with tools and products needed to reach poor clients, especially women and enable them to combine microfinance with health education, child survival and HIV/AIDS prevention.

The United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) features the Year of Microcredit in their February 2005 Updates. Click here to read more.

COPAC is a unique platform for exchange and coordination among
representatives of the cooperative movement, cooperative development
agencies, farmers' organizations, and the United Nations and its agencies. Members work together on equal terms to promote and coordinate sustainable cooperative development through policy dialogues, technical cooperation and information, and concrete collaborative activities. COPAC annually decides the theme of International Day of Cooperatives, and this year focused on the
theme of microfinance. COPAC members issued messages for the Day to raise awareness on the important and significant role that cooperatives play in providing micro credit, savings and insurance, while cooperative
organizations around the world organised meetings with policy makers, events in their communities, and contests to raise children's awareness on the cooperative form of enterprise. See links to the information on the
International Day of Cooperatives at: www.copacgva.org/idc/2005

Multi-lateral financial institutions

The World Bank will pursue a number of activities guided by the fundamental principle of developing financial systems that work for the poor. The Bank will continue its analytical and policy work, increasing its knowledge base and providing policy recommendations to client countries. Efforts will be made to further elaborate methods and indicators to measure the degree to which the poor have access to financial systems in order to ensure that Country Assistance Strategy and Poverty Reduction Support Programmes reflect the conditions and needs that low income people and small businesses have for financial services. The Bank will finance projects in numerous client countries aimed to engender sustainable expansion of access to financial services. In 2005, projects devoted to increasing broad-based participation in the financial system are expected to receive Bank funding in India, Indonesia, Nicaragua, Mexico, Central Africa, Madagascar and Tanzania, among others. In addition, a number of activities are planned to disseminate knowledge gained from these projects, related to policies that expand the reach of financial systems. The World Bank Institute will sponsor distance learning for policy makers and members of civil society in addition to a series of educational events focusing on improving the availability and terms of credit, savings, insurance and payment services, including remittance payments in World Bank client countries.