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2,000 Poverty Fighters Expected to Join Queen of Spain for Global Microcredit Summit

VALLADOLID, SPAIN – Nov. 14 – Today, some 2,000 poverty fighters from more than 100 countries will join the Queen of Spain, Nobel Peace Prize Laureate Muhammad Yunus and Danone Chairman Franck Riboud in this historic Spanish city for a monumental four-day global gathering of dignitaries, microfinance practitioners, donors and other poverty fighters from every region of the world.  The Global Microcredit Summit 2011 comes at a critical time, with just four years left for the international community to reach the Millennium Development Goal of halving the world’s population living in extreme poverty by 2015.

Last week it was announced that 137.5 million of the world’s poorest families received a microloan in 2010, an 18-fold increase since the original Microcredit Summit in 1997, when only 7.6 million very poor families had a microloan.  Assuming an average of five persons per family, these 137.5 million microloans affected more than 687 million family members.  That astonishing accomplishment is reason enough to gather the leaders of the industry from across the globe to discuss how to further increase the impact that this powerful development tool has on the fight against global poverty. 

But delegates to the Summit will also address the challenges that have accompanied this staggering growth.

“We are inspired by the number of delegates who will join us in Valladolid and expect the next four days to include powerful stories of success, as well as the challenges faced in these trying times,” said Microcredit Summit Campaign director Sam Daley-Harris.  “When we last came together five years ago at the Global Microcredit Summit in Canada, the Norwegian Nobel Committee had just announced that Muhammad Yunus would share the Peace Prize with Grameen Bank, the groundbreaking bank he founded.  Since then, we have faced new challenges, but we must continue to highlight the work of those institutions implementing the most innovative solutions to help their clients rise out of the devastating blight that is extreme poverty.”

Of the more than 100 sessions featured at the Summit, one will have delegates grappling with issues such as over-indebtedness, client drop-outs, unethical collection practices, exorbitant interest rates and mission drift, while another will offer the first public discussion of a Seal of Excellence for Poverty Outreach and Transformation in Microfinance, which has been in development for 19 months.

Microfinance has been called a revolution in banking.  That is no more evident than when Nobel Laureate Muhammad Yunus was asked what his strategy was in forming Grameen Bank.  “I didn’t have a strategy,” Professor Yunus responded. “I just kept doing what was next.  But when I look back, my strategy was, whatever banks did, I did the opposite.  If banks lent to the rich, I lent to the poor.  If banks lent to men, I lent to women.  If banks made large loans, I made small ones.  If banks required collateral, my loans were collateral free.  If banks required a lot of paperwork, my loans were illiterate-friendly.  If you had to go to the bank, my bank went to the village.  Yes, that was my strategy.  Whatever banks did, I did the opposite.”

Sessions at the Summit will demonstrate that microfinance institutions can provide access to financial services and, in some cases, offer non-financial services that can contribute to improvements in the health, education and overall well-being of clients and their families.

The Spanish Secretary of State for International Cooperation Soraya Rodríguez Ramos has made it clear that the Global Microcredit Summit could not have come at a more critical time and that the Spanish government continues to be a strong supporter of microfinance programs committed to helping people work their way out of poverty. The more than 2,000 international and Spanish delegates will gather in Valladolid this week to share innovations, address challenges and continue developing plans for a way forward.

Nearly 2.6 billion people in the world today have no access to formal financial services.  Microfinance works to reduce this gap and to offer non-financial services to help improve the lives of families around the world. Microfinance institutions have the ability to effectively deliver education and health services to the poorest, especially to women living in rural areas of the world.  When combined with savings and loans, these interventions are powerful tools in the fight against global poverty.  

“Time and time again, the clients tell us the same thing when asked what they want for themselves and their families,” said incoming Microcredit Summit Campaign Director Larry Reed.  “They want regular meals, a place to live that keeps the rain and the cold out, education for their children and better health for their families.  That will be the focus of our work at this Summit and in the months and years to ahead.”

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.

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