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Africa advances its micro-credit agenda

Advocates urge greater regional focus in wake of summit

By Ernest Harsch

Ensuring that Africa's poor gain greater access to credit can be an especially effective weapon for combatting poverty, participants agreed during a 6 February "African Advocacy Forum" at UN headquarters. Sponsored by several UN institutions and involving micro-credit practitioners from different regions of Africa, the meeting was designed to build on the momentum generated by the "Micro-credit Summit" held in Washington just a few days earlier and to spotlight Africa's specific experiences, concerns and needs.

The fact that Africa is the only world region in which poverty is expected to increase, noted a declaration by 43 African micro-finance organizations, presents "a strong rationale for donors, governments and practitioners to give special attention to Africa's poorest families in the follow-up to the summit goals." Moreover, they said, African micro-credit organizations, few of which were even aware of the preparatory process for the Washington summit, need to be better informed and more closely involved in future undertakings.

Africa's own experiences

Numerous participants noted that Africa has had a long history of micro-credit institutions, some of them quite successful at the local level. They therefore regretted that the Washington summit had concentrated mainly on micro-credit "success stories" from Asia and Latin America. "Africa had not been focused on at all," observed Ms. Felicia Quartey-Acquaye of Women's World Banking in Ghana.

Indigenous forms of micro-credit, known variously as esusu or tontines, have existed in Africa since pre-colonial times, Ms Quartey-Acquaye observed, drawing applause. Chief Bisi Ogunleye, founder of the Country Women Association of Nigeria, urged support for research and documentation of indigenous credit institutions. "It is time for the world to know what we have and can share

with others," she said.

Chief Bisi also noted that the further development of micro-credit schemes is especially important for rural women, to strengthen their productive capacities and thus contribute to food security. Since the majority of food producers in Africa are women, as are the majority of micro-credit clients, said Chief Bisi, "we must see micro-credit, food security and poverty eradication in Africa as three-in-one."

Another important role for micro-credit organizations, observed several speakers, is to link local communities with more formal banking institutions. "Micro-credit practitioners need to build up their capacities to serve as intermediaries. They need to build networks," said Ms. Victoria Masenya of the Women's Finance House in Botswana. Mr. Makha Sarr, the UN Special Coordinator for Africa and the Least Developed Countries, stressed that "micro-finance is an integral part of financial intermediation, which is one of the priorities for Africa."

‘One of several elements'

Many speakers explicitly linked micro-credit to other development activities, such as job creation, small business promotion and youth advancement; they cautioned that micro-credit should not be fostered in isolation.

Micro-credit is "only one of several elements" in the development process, noted Mr. Wilbert Tengey of the African Centre for Human Development in Ghana. The poor also need better health and educational services, for if they must spend all their meagre earnings on such necessities, "there will be little left to reinvest." Ms. Quartey-Acquaye stressed the need for governments and donors to review the impact of economic policies on poor rural women. "Micro-credit has to survive within a broader macro-economic environment," she said.

Summarizing the sense of the meeting, Ambassador Machivenyika Mapuranga of Zimbabwe said, "Micro-credit is not a panacea or a magic wand. But it can be a major instrument of poverty alleviation." ***

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