Stressing that micro-financing is crucial to poverty reduction worldwide, the United Nations labour agency has hailed the work of a United States-based non-governmental organization that seeks to reach 100 million of the poorest families with very small loans by the end of 2005, the UN International Year of Microcredit.
“The successes of microfinance institutions around the world - from Bangladesh to Bolivia, from Uganda to the Philippines - testify to the power of microcredit in charting a sustainable route out of poverty," International Labour Office (ILO) Juan Somavia said of new report by the Microcredit Summit Campaign 2004.
The Campaign, a program of RESULTS Educational Fund, says it has already helped an estimated 274 million family members, (a figure nearly equal to the total population of the United States) by extending small loans on favourable terms and other financial and business services to the self employed, thus creating jobs.
Microcredit “promotes self-employment and helps people expand their economic activities so they can hire others,” Mr. Somavia said.
Microfinance often plays a critical role in the ILO's programmes, particularly those aimed at helping countries implement core labour standards such as the elimination of forced labour and child labour.
Over the past decade, the ILO has pioneered several microfinance applications: linking worker remittances to microfinance, post-conflict microfinance, micro-leasing, micro-insurance and micro-equity. It will be participating in activities relating to the International Year of Microcredit.