Skip Global Navigation
News
IDB Home > News
Comment Tool Comment
Comment Tool Comment

Your comment for this page:






Share Tool Share
close Share Tool Share

News Releases

Oct 6, 2010

IDB promotes transparency, social responsibility in microfinance

At Foromic, Moreno underscores the soundness of the Latin American and Caribbean financial system in the face of the global crisis

MONTEVIDEO, Uruguay – The Latin American and Caribbean microfinance industry, which continued growing despite the global economic crisis, will have to work hard to ensure transparency in its operations and its clients’ welfare, Inter-American Development Bank President Luis Alberto Moreno said today.

Moreno and Uruguayan President Jose Alberto Mujica opened the 13th Inter-American Forum on Microenterprise (Foromic 2010), which is taking place here until Friday.

According to the Multilateral Investment Fund (MIF), the IDB affiliate specialized in microenterprise, at the end of last year there were some 700 microfinance institutions in this region, serving nearly 10.5 million clients and with a loan portfolio totaling $12.3 billion. At the end of 2008, when the crisis was underway, this industry had 9.4 million clients and $10.9 billion in microloans outstanding.

In his speech to the participants of Foromic, the leading annual conference on microenterprise in Latin America and the Caribbean, Moreno said that the microfinance industry is entering a phase of consolidation and specialization.

“In this new stage -- and this is one of the lessons from the recent crisis -- there will be growing concern over consumers’ welfare. Therefore it’s crucial for the industry to start anticipating their needs and to work hard to increase transparency and offer greater protection to its clients, as well as to take steps towards measuring the social performance of microfinance. At the IDB we’re proud to support such efforts,” Moreno said.

In welcoming the event’s participants, Mujica highlighted the role microfinance plays in countering abusive lending practices. The Uruguayan president said microcredit contributes to social equity and can be a “tool for liberation” for the poor.

Social performance is the central topic of Foromic 2010, which brought together more than 1,400 delegates from microfinance institutions, credit unions, banks, investment funds, regulating agencies and national and international organizations. Measuring the social impact of microfinance will complement the more traditional financial performance indicators used by the industry.

The microfinance industry has yet to overcome the challenge of reaching more businesses and households. According to the MIF, nearly 60 million microentrepreneurs in Latin America and the Caribbean lack access to formal credit and other basic financial services. A majority of businesses in Latin America are microenterprises, which typically have fewer than 10 workers. Nevertheless, they generate more than half the region’s jobs.

Modern-day microfinance stems from the experiences of a handful of non-governmental organizations that started supplying small loans to poor women more than three decades ago. Since then the industry has made great strides to expand, diversify and professionalize its services.

The MIF supported several innovations that helped spark microfinance’s remarkable growth in Latin America and the Caribbean. Besides providing funding and technical assistance to this region’s leading microfinance networks, the MIF also led the transformation of many NGOs involved in microcredit into regulated institutions, a process that catalyzed the growth of financial services for low-income people.

Inter-American Awards for Microenterprise Development

As part of the opening ceremony, two microfinance institutions from the Dominican Republic and Bolivia and a Nicaraguan renewable energy company received awards for their outstanding services to microenterprise in Latin America and the Caribbean.

Banco de Ahorro y Crédito ADOPEM of the Dominican Republic won the award for best microfinance institution for offering innovative products to underserved populations. Bolivia’s Banco FIE took the award for best practices in social performance. 

Nicaragua’s Tecnosolución, a provider of alternative energy solutions, received an award for excellence in enterprise development services, which this year recognized the delivery of groundbreaking services for microenterprises and small businesses in rural areas.

In addition, the IDB awarded prizes to three Uruguayan businesses, MCT Ingenieria, Tierra del Sol and Kizanaro Sport Technology, for their inventive goods and services and their contributions to local economic development.

Press Contact

© 2014 Inter-American Development Bank - All Rights Reserved.