Press release number: IFAD/40/06

Rome, 9 November 2006 – More than 2000 delegates from over 100 countries are due to gather in Halifax, Nova Scotia, Canada, on Sunday, to launch the second phase of the Microcredit Summit Campaign, pledging to ensure that 175 million of the world’s poorest families are able to receive credit and other financial services by the end of 2015.

 “Basic financial services, like credit, savings, and insurance, can provide greater economic opportunities for poor people as well as reduce their vulnerability to external shocks, such as natural disasters or fluctuating market prices,” says IFAD President, Lennart Båge, who is scheduled to lead one of the summit’s panel discussions.

''This is particularly important in rural areas of the developing world, where 800 million extremely poor people live,'' says Båge.

Nobel Peace Prize winner Mohammed Yunus is a key player in the campaign and also expected to attend the four-day global summit. As founder of the Grameen Bank in Bangladesh, Yunus has worked to provide small loans to millions of poor people since 1976.

Microfinance has proved especially effective in empowering poor women, who often make up the majority of microfinance clients and have the best credit ratings. Research shows that women invest additional earnings in their children’s education and the family’s health and nutrition.

IFAD feels privileged to have been one of the first United Nations agencies to support Yunus’ visionary initiative on behalf of poor rural people. IFAD provided funds to the Grameen Bank during its initial stage from 1981 to 1985.

IFAD works with a range of institutions and organisations, including village banks and community groups, non-governmental organisations, financial cooperatives and formal banks, to make microfinance services more accessible to poor rural people. It also promotes a wide range of financial services and products, including savings, insurance and “remittances” or money transfers.

Rural finance currently accounts for US$730 million of IFAD’s funding portfolio.

Some of IFAD’s initiatives in rural finance include:

• Remittances. IFAD, the European Union and the Consultative Group to Assist the Poor recently launched a US$5 million Funding Facility on Remittances to support innovative approaches that will make remittances more accessible in rural areas and boost the effectiveness of the billions of dollars sent home annually by migrant workers.

• Transparency and performance monitoring. IFAD is working on ways to enhance the transparency of performance reporting by microfinance institutions, including the area of social performance, which monitors whether and how microfinance institutions reach their social goals and ambitions.

• Microinsurance. In 2007, IFAD will be working with private insurers and microfinance institutions to design and test microinsurance products that will better serve poor rural people.

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IFAD is a specialized agency of the United Nations dedicated to eradicating poverty and hunger in rural areas of developing countries. Through low-interest loans and grants, it develops and finances projects that enable rural poor people to overcome poverty themselves. There are 188 ongoing IFAD-supported rural poverty eradication programmes and projects, totalling US$6.3billion. IFAD has invested more than US$2.9 billion in these initiatives. Cofinancing has been provided by governments, beneficiaries, multilateral and bilateral donors and other partners. At full development, these programmes will help nearly 85 million rural poor women and men to achieve better lives for themselves and their families. Since starting operations in 1978, IFAD has invested US$9.2 billion in 716 programmes and projects that have helped approximately 301 million poor rural men and women achieve better lives for themselves and their families. Governments and other financing sources in the recipient countries, including project participants, have contributed almost US$8.9 billion, and multilateral, bilateral and other donors have provided another US$7.0 billion in cofinancing.