Seal of Excellence will help the microfinance sector further its social mission
VALLADOLID, SPAIN (Nov. 15) -- At the Global Microcredit Summit, the Global Advisory Committee for the Seal of Excellence assured attendees that the seal will help the microfinance sector to further its social endeavours.
At the first plenary session of the summit, a document drawn up by Frances Sinha, director of EDA Rural Systems in India, was presented, about the development of the Seal of Excellence for Poverty Outreach and Transformation in Microfinance. The panel included the members of the global advisory committee: Isabel Cruz Hernández, president of the Latin American and Caribbean Rural Finance Forum in Mexico; Anne Hastings, executive director of Fonkoze Financial Services in Haiti; Christopher Dunford, lead researcher at Freedom from Hunger in the US; John de Wit, managing director of the Small Enterprise Foundation (SEF) in South Africa; and Manuel Méndez del Río Piovich from Fundación Microfinanzas BBVA, who chaired the panel.
“The idea of a Seal of Excellence in microfinance is to set a vision for the sector in terms that highlight the potential of microfinance to serve the poor and to contribute to a positive transformation in the lives of clients and their families and communities,” wrote the report’s author, Frances Sinha.
“The aim is to analyse the value of microcredit in the lives of the poorest people. Not only must it be sustainable, but we must also analyse the value we can offer to customers,” she explained during the session.
This seal will be developed by the advisory and technical committees, with a view to deciding on the implementation process over the next six months. “The microfinance sector will be redefined to be responsible, sustainable and contribute to achieving a positive change,” said the author.
Sinha explained that a seal would also provide a means of identifying and recognizing microfinance institutions (MFIs) that implement this vision using objective criteria based on a double-bottom-line ethos that underscores both the social and financial performance of MFIs. “This idea is increasingly relevant today, as recent developments -- even crises -- in some countries have demonstrated the risks of concentrating on the single bottom line of financial performance alone,” she said.
During the session, the president of Fundación Microfinanzas BBVA, Manuel Méndez del Río Piovich, said that this is a “magnificent time to strengthen the ethical commitment to seek sustainable economic and social development.”
The managing director of the Small Enterprise Foundation (SEP), John de Wit, assured attendees that the aim is to differentiate between constructive microfinance institutions that help people to get themselves out of poverty, and those that do not.
Inauguration of the Global Microcredit Summit
Her Majesty Queen Sofia of Spain, and the founder of Grameen Bank, Nobel Peace Prize winner Professor Muhammad Yunus, opened the “V Global Microcredit Summit” at a ceremony that also featured the participation of Soraya Rodríguez, Spanish Secretary of State for Development Cooperation; Trinidad Jiménez, Spanish Minister of Foreign Affairs; Sam Daley-Harris, Director of the World Microcredit Campaign; Juan Vicente Herrera, President of the Autonomous Government of Castilla y León; and Francisco Javier León de la Riva, Mayor of Valladolid.
At the inauguration, Queen Sofía said that “the world of microfinance and this Summit are absolutely necessary” to achieve the United Nations’ Millennium Development Goals and reduce by half the number of people living on less than one dollar a day. The Queen highlighted that “Spain has become the second largest donor [to the microfinance sector] in the world.”
Prof. Yunus said that “microcredit is a way of helping future generations, because they are the future.” Yunus expressed regret that the crisis had forced decisions to be made that affected microcredit. “Dark clouds are gathering and they will not go away; they will create frustration and disappointment, a great deal of unemployment and tension” in various governments in the Western world. Against this backdrop of dark clouds, he argued that “microcredit is a shining hope, creating light at the end of the tunnel.”
At the inauguration, the Director of the Global Microcredit Summit Campaign stated that microcredit restores the value of people and frees them from hunger and despair. Sam Daley-Harris criticised those who focus microcredit as a sole means of redemption.
In her speech, the Spanish Minister for Foreign Affairs said that Spain contributes more than any other OECD country to development cooperation, the seventh highest amount in the world. “The crisis has forced us to make decisions, but that will not affect our convictions. We must continue making effective progress toward the eradication of poverty.”
The Spanish Secretary of State for Development Cooperation highlighted that 1.4 billion people live on less than one euro a day and that among the poorest people, eight out of every ten are women. Soraya Rodríguez stressed the “courage, bravery and tenacity” of professor Yunus and emphasised that microfinance “opens up a window of opportunity,” adding that “we need ideas and this Global Summit is a unique opportunity.”
The Microcredit Summit Campaign aims to reach 175 million of the world’s poorest families by 2015 and ensure that 100 million of those families move above the World Bank’s $1.25-a-day poverty threshold.