137 Million of World’s Poorest Received a Microloan in 2010

(VBSP News) Among 137.5 million poorest families worldwide received microloan in 2010, 7.3 million households, almost the poor, in Vietnam were reached by Vietnam Bank for Social Policies (VBSP). VBSP makes great efforts to develop diversified financial products and services as savings product, remittance service excluding microloan. Through 18 existing lending programs for 18 different policy beneficiaries, VBSP gradually makes the dream of the poor become true: regular meals (microloan for business and production)

Microcredit Summit Campaign - The Microcredit Summit Campaign is a project of RESULTS Educational Fund, a U.S.-based advocacy organization committed to creating the will to eliminate poverty. The Campaign was launched in 1997 and, in 2007, surpassed its original goal of reaching 100 million poorest families with credit for self-employment and other financial and business services. The Global Microcredit Summit 2011 was held November 14-17 in Valladolid, Spain. 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.

 More than 137.5 million of the world’s poorest families received a microloan in 2010—an all-time high, according to a report by the Microcredit Summit Campaign. Assuming an average of five persons per family, these 137.5 million microloans affected more than 687 million family members, which is greater than the combined populations of the European Union and Russia. Microloans are used to help people living in poverty in both industrialized and developing countries to expand a range of small businesses, such as selling products in a local market, making clothes, and providing computer and other business services in rural areas.

The report’s release precedes the Global Microcredit Summit 2011 held November 14-17 in Valladolid, Spain, which was inaugurated by Her Majesty Queen Sofía and Nobel Peace Prize laureate and Grameen Bank founder, Muhammad Yunus. “At the first Microcredit Summit in 1997, only 7.6 million of the world’s poorest families had been reached,” said Prof. Yunus. “While the growth in numbers has been inspiring, we must keep our attention on the wisdom from the clients. The report tells us that when asked what they want for themselves and their families, their answers include, ‘education for their children, health for their family, decent housing that keeps the rain and cold out, and regular, nutritious meals.’ This is what we will pursue when we gather at the Microcredit Summit in Valladolid.”

 While more than 205 million people worldwide received a microloan in 2010, this multi-year campaign focuses on outreach to the poorest clients. According to the report, over the last 13 years, the number of very poor families with a microloan has grown more than 18-fold from 7.6 million in 1997 to 137.5 million in 2010. The latest data comes from more than 3,600 institutions worldwide, with more than 94 percent of the information having been collected within the last 18 months. The report also highlights the number of poorest women reached. Not only have these women been the most excluded from traditional banking, but they are also the ones most likely to ensure that the increased income is used to improve the lives of their children. From 1999 to 2010, the number of poorest women reached has increased from 10.3 million to 113.1 million.

 However, in the last year microfinance has faced setbacks as well. An initial public offering of SKS, a microfinance institution (MFI) based in Andhra Pradesh, India, was followed by charges of over-indebtedness and suicides among clients in that state, resulting in a clamp-down by the state government last October.

 “As a microfinance community, we need to shift our focus from outreach to results,” said Larry Reed, incoming director of the Microcredit Summit Campaign.  “The State of the Microcredit Summit Campaign Report 2012 outlines important steps that we can take together to insure that the financial services we provide result in regular meals, secure housing, uninterrupted education, and better health for our clients and their families.”