The World Bank should spend more money on giving small loans to the worlds poorest people to reduce the number that live on less than a dollar a day, according to a report published Thursday.
The Microcredit Summit Campaign, which aims to provide affordable loans to 100 million families, is supported by the World Bank president James Wolfensohn.
The campaign officials, however, say the amount spent is not enough. Campaign director Sam Daley-Harris said: – The truth of the matter is that currently less than one percent of annual World Bank spending goes to microcredit. The World Bank can do better than that.
The campaign was set up to help to achieve the Millennium Development Goal of halving the number of people living below a dollar a day by 2015. Last year, 54 million of the worlds poorest people, 81 percent of them women, received tiny loans to start or expand small businesses.
– This is a revolution in banking, said Daley-Harris adding: – When banks lent to the rich, these micro-banking pioneers lent to the poor.”
Micro-loans are used for a wide range of business activities, from riding bicycle rickshaws and sewing to selling mobile phone time in rural areas where no other phone service exists.
Inter Press Service meanwhile writes that while microcredit alone is not a cure-all solution to overcoming poverty, it can be a powerful tool when combined with technical assistance, training and a better distribution of wealth.
According to a report from the International Fund for Agricultural Development (IFAD), the microfinance sector has grown by an average of 25 to 30 percent annually over the last five years, which makes it an attractive area for the worlds big commercial financial institutions.
Further, the Latin American Development Fund (FOLADE) says that 40 percent of the roughly 540 million inhabitants of Latin America are involved in some form of micro-enterprise, yet only eight percent of this total receive financing for their activities.
Kilde: www.worldbank.org
