Report from the 2011 Global Microcredit Summit, Valladolid, Spain – Day 1
Attending the Summit, Clara Lipson, Founder& Executive Director AboutMicrofinance.com was one of more than 1,800 delegates from 104 countries. The Opening Ceremony included Queen Sofia of Spain, Prof. Mohammad Yunus, and several Spanish officials. As the 5th Microcredit Summit, a number of new initiatives were introduced with a strong focus on clients. Prof. Yunus spoke of the need to empower youth through technology, creativity and education as they will become the leaders of tomorrow. Queen Sofia, who has been supportive of microfinance for over a decade, noted that Spain is the second largest donor to the microfinance sector in the world, and particularly programs for women.
The afternoon Plenary Session, entitled “’Ethical’ Financial Services: Developing a Seal of Excellence for Poverty Outreach and Transformation in Microfinance”, was intended to promulgate the benefits of a Seal of Excellence focused on microfinance clients combined with integrated reporting. A panel of international microfinance experts has been working on this concept focusing on the value of microcredit in terms of sustainability, ethical and financial services that meet the needs of the poor. The Seal’s goal is to set standards for the microfinance as it was originally envisioned — to serve the poor. It will help identify and recognize microfinance institutions that meet specified guidelines, and will overall further the social mission of microfinance.
The implementation process, it was noted, will be determined over the next six months. In response to an audience question as to how the Seal of Excellence will differ from other existing performance and reporting measures (e.g. SMART campaign, and the Social Performance Task Force/SPTF), it was noted that evaluations would be based on various social and financial standards and include impact of microfinance on families and communities. As a panelist, John de Wit, managing director of the Small Enterprise Foundation (SEP), assured attendees that the aim of the Seal is to differentiate between constructive microfinance institutions that help people get themselves out of poverty, and those MFIs that do not meet such objectives.
The afternoon sessions also included 16 workshops, ranging from discussions on regulatory issues for MFIs, to financial literacy, currency risk, product innovations, technology for clients and MFIs, and obtaining funds for MFIs. The latter included interesting discussions on “Crowd Funding”, which utilizes direct and indirect fund-raising. Indirect fund-raising is a P2P method, of which KIVA is most prominent with one million ‘investors’. Detailed highlights of other workshops will follow shortly.