Global perspective Human stories

Availability of small loans, savings accounts can make a difference to the poor, says Annan

Availability of small loans, savings accounts can make a difference to the poor, says Annan

As the United Nations today dedicated 2005 to highlighting the benefits that small loans and savings accounts can bring to the world's poor and low-income people, United Nations Secretary-General Kofi Annan stressed the need to make such financial services more accessible.

"Microfinance has proved its value, in many countries, as a weapon against poverty and hunger," he said in a statement to mark the formal launch of the International Year of Microcredit. "It really can change people's lives for the better - especially the lives of those who need it most."

With microfinance, the poor could move beyond day-to-day survival towards planning for the future with better nutrition, housing, health and education for their children, Mr. Annan said. He added that a small loan, a savings account, an affordable way to send a paycheque home, "can make a difference" to a poor family.

"If we are to reach the Millennium Development Goals (MDGs), that is exactly the kind of progress we need to make," he said. "Microfinance is not charity. It is recognition that poor people are the solution, not problem. It is a way to grow productive enterprises, and so allow communities to prosper."

He voiced his belief that no country can flourish without business development. "Let us use this International Year of Microcredit to put millions of families on the path to prosperity," he said.

The UN launched the Year in a bid to raise public awareness about microcredit and microfinance, and promote innovative partnerships among governments, donors, international organizations, non-governmental organizations (NGOs), the private sector, academia and microfinance clients.

Launch observances began with the ringing of opening bells at stock exchanges around the world by micro entrepreneurs from Cambodia, the Dominican Republic, Indonesia, Mexico, Rwanda and the United States. The participants are all recipients of the Global Microentrepreneur Awards coordinated by Harvard Business School and other graduate institutions.

In New York, local Microentrepreneur Award winners were to open the NASDAQ market, while nine exchanges from Karachi, Pakistan; to Zurich, Switzerland; and from Manila, the Philippines; to Maputo, Mozambique; are also taking part in this coordinated initiative.