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Microfinance, financial inclusion and sustainable development

Solène Morvant-Roux

Part 1. From microcredit to microfinance

Introduction : Microfinance and its expansion
Over the last thirtyyears or so, microfinance and more recently “financial inclusion” have become some of the highest profile policies for addressing poverty and under-development in developing countries.
What isMicrofinance?
Microfinance is a term for the practice of providing financial services, such as microcredit, microsavings or microinsurance to poor people.
Aimed at serving « financially excluded »People who for some reasons have no access to formal financial sector (banks) for credit services, savings, etc. Financial exclusion in southern countries : between 60-90% of the population

[Map :see PPT]

In a context of transforming development policies (we will come back to it later), many microfinance institutions (microlenders) have flourished in almost all the countries around the worldeven in North Europe: see Adie in France and “Microcrédit Solidaire” in Switzerland (in those countries financial exclusion is lower but still does exist).

[Financial exclusion]: in southerncountries, financial exclusion doesn’t mean poverty, less-poor also face financial exclusion

Progress from 1997 to 2007
Date | Number of Programs Reporting | Total Number of Clients Reached | Numberof Poorest Clients Reported |
1997 | 618 | 13,478,797 | 7,600,000 |
1998 | 925 | 20,938,899 | 12,221,918 |
1999 | 1,065 | 23,555,689 | 13,779,872 |
2000 | 1,567 | 30,681,107 | 19,327,451 |2001 | 2,186 | 54,932,235 | 26,878,332 |
2002 | 2,572 | 67,606,080 | 41,594,778 |
2003 | 2,931 | 80,868,343 | 54,785,433 |
2004 | 3,164 | 92,270,289 | 66,614,871 |
2005 | 3,133 |113,261,390 | 81,949,036 |
2006 | 3,316 | 133,030,913 | 92,922,574 |
2007 | 3,552 | 154,825,825 | 106,584,679 |

The idea behind Microfinance: Objectives

* Promote the creation of economic...