Ismail Serageldin


Statement at Microcredit Summit

 02/02/1997 | Microcredit Summit


Your Majesty, Excellencies, Ladies and Gentlemen:

Consider the paradox of our times. We live in a world of plenty, of dazzling technology and enormous prosperity. Capital markets transact over $1.2 trillion a day, enough to buy and sell the entire US economy in a week. Globalization brings unrivaled opportunity to the nimble, the educated, and the powerful. Yet, economic uncertainty and tragic poverty remain the lot of most of humanity. But there are rich people in poor countries and poor people in rich countries. Poverty, too, is a global phenomenon.


Inequalities are growing within countries and between countries. The richest 20% of humanity have more than 80% of the world’s income. They are also 60 times as rich as the poorest 20%. And yet, so many of the rich want to turn their backs on the poor. Those poor who do not ask for a handout but for an opportunity.

Over a billion people live on less than a dollar a day. Because of extreme poverty, some 800 million people go hungry and 40,000 people die from hunger related causes every day. Population pressure adds to the challenge. Two hundred more persons on the planet every minute, with 95% of those in the developing countries.

This is, more than ever, a time for a coalition of the caring.

This Summit, bringing together the practitioners and the financiers, the political leaders and the legislators, the media and the civil society...the national, local and international agencies, the birth of that coalition. The beginning of a movement to curb extreme poverty and abolish its corollary, hunger.

We all know that the reduction of poverty requires sound economic policies, broad-based growth, investment in people and sustainable resource management. But the poorest are those who benefit least if we do not proactively reach services for the very poor, especially women. It reduces vulnerability, unleashes talent, establishes solidarity and, above all, safeguards human dignity.

We know what needs to be done. The pioneers have shown the way. Grameen, SEWA, FINCA, ACCION, WWB, KREP and so many others have proved that micro credit for the poorest is financially sound. That the poorest are the best customers. Today, some 7,000 grassroots institutions reach out with some $8 billion of loans to over 13 million customers. Some 8 million of these are among the poorest we are talking about here. But savings should not be forgotten. Indeed, there are already some $19 billion mobilized from some 45 million small deposits. The micro-finance movement already has substantial scale.

The obstacles to rapid expansion to reach the goals of the Summit are known: capacity building, especially private capital flows, to the effective micro-financiers, those who combine financial sustainability with extensive coverage. Ways to deal with each of these obstacles are also known.

Let us dedicate ourselves, each in our sphere of competence, to do our share in achieving the goals of the Summit, working with the others, so that the whole is more than the sum of the parts. Learning from the others so that the best practices of the few become the standard practices of all.

The President of the World Bank, Jim Wolfensohn, will be addressing this Summit, and will tell you that the World Bank will do its part, in promoting the enabling regulatory framework, financing wholesalers where appropriate, joining with others to promote sound standards and best practice primarily through the Consultative Group to Assist the Poorest (CGAP), and working with the private sector, primarily through the International Finance Corporation (IFC), to build bridges between the commercial sector and the micro-financiers. And we pledge ourselves to work with all others in the unremitting battle against poverty.

The President of Uganda likened today’s poverty to yesterday’s slavery. Slavery was fought by people who argued from moral outrage, who combined passion and compassion. They were called abolitionists. Today we must all become the new abolitionists. We must dare to dream and to be bold.

In the few minutes that I have been speaking:

    • $4 billion were transacted by the capital markets
    • 1000 persons were born
    • 150 died from hunger related causes...

There is no time for complacency, the time for action is now. Our goals are reachable: It can be done. It must be done. It will be done.


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