The first part was in French, the second in English. I've made an attempt of translation...
Ladies and gentlemen,
"The College of Europe, an education without borders, with nearly 400 studiants coming from 47 different countries, offers an environment of unique schooling: competitif, multicultural and in multiple languages".
When I read this description in your brochure, to be honest, I was very impressed.
I immediately understood that I would be meeting curious, motivated and concerned young people today, for who life is a challenge in a Europe that's constantly on the move, the young people that one day will make the decisions in Europe, and even beyond the European borders.
Mister rector, I especially want to thank you for your kind invitation, because it allows me to adress the students present here, in this prestigious college in Bruges, but also to those who are listening in the campus in Natolin, Poland. I greet you all!
In a few moments I will talk to you about a subject that's especially dear to me. Now I'm sure this is a subject that many of you know not so well, or not at all. None the less it's a theme that the past years has got more and more interest from decision makers, in the public and the private sector. A theme that, amongst other, incites a growing sensibility in the banking world.
It's microcredit, or in a larger context, microfinance.
Don't be alarmed, I won't give you a theoretic course on microfinance! My only ambition is to raise your curiosity and ambition. This way I hope to make you feel a solidarity with the micro-entrepreneurs, by showing you a financial instrument that, according to my experience in the field, is efficient in the battle against poverty. I have seen encouraging results in China, Mali and India.
But let's face it, poverty isn't only present in developping countries. Also close to us - the prosperous North - poverty is present, often in a hidden way.
What is the microcredit I mentioned about ?
The micro-entrepreneurs are little independants with often a precarious financial condition, which excludes the traditional financing system for them. A microfinance institution gives them a small sum of money, with which they should develop a small economic activity such as for example a shoeshop, a fruitstall, a traditional jewellery shop, a hairdresser's salon...Thus the system allows them to live their dream with a modest sum as a starting capital. This small scale credit - sometimes it isn't more than ten euro or dollars - slowly transforms poverty into progress; it allows micro-entrepreneurs to escape from the daily surviving routine and to pass on to making plans for the future.
Of course microfinancing does not equal a remedy to abolish poverty once and for all. The participation of the population in the developping countries in the economic and financial life is limited by many obstacles and fierce predjudices. In the first place I think about the widespread idea that the poor aren't rentable or reliable. There's also the necessary closeness of services, the absence of an appropriated legal and financial framework, or new technologies that aren't accesible...
In my role of emissary for the United Nations for the international year of the microcredit, I cose from the beginning to stress the social impact this system of financing has.
And indeed I have often concluded that poverty has a female face, but the paradox is that women have many talents and are avid for innovation, they are often the motor of the family. So it are largery women that benefit from the services of the microfinance institutions. Their goal is not only to get the financial means they need, but also - and above all - to improve their status, their living conditions and those of their children by giving them a good education and a better acces to health care.
I would like to tell you an anectdote from my visit to India a few months ago. This story made me think deeply about the importance of microcredit.
During my mission to India last year, I had the opportunity to talk to various female micro-entrepreneurs from the South of the country. These women had travelled 2 full days and crossed 800 km in train to tell me about their personal microcredit experiences. I was inspired by their audacious thoughts, the perseverance and the wisdom of these women who, never having studied, were perfectly capable of running their own business and to earn money. Their profit went to the education of their children.
The fact they told me their story and most of all that they were listened to and taken seriously was for them a sign of respect for the things they had achieved. But our meeting also meant the recognition of the work they had done for their own community. A community where still a lot of hesitation exists when it comes to allowing microcredits to women.
It's important to promote financial instruments that not only allows the micro-entrepreneurs to develop economically, but also in a human way. Our attention for the social consequences of microcredit should join the attempts the sustain the financial benefits of microcredits. This is a constation made by many experts at the end of the international year of the microcredit.
The Year of Microcredit 2005 was one of the United Nations’ most successful years.
It raised awareness of microcredit, and identified not just the obstacles to a commercial viable microfinance system. It also highlighted best practices. It paved the way for the creation of a comprehensive research database - crucial for a better understanding of the demands and needs of microfinance clients.
The Year put microcredit and microfinance in general on the agenda of policymakers
nationally - with the setting up of more than a hundred national committees worldwide and internationally - with the involvement of the World Bank and the International Monetary Fund and the recognition of the importance of microcredit by the G8 and other policymaking bodies.
The Year mobilised the private sector and contributed to the realisation of the Millennium Development Goals, one of which is the alleviation of poverty.
Not just microcredit, but other financial services were focused upon – savings, insurance, lending, remittances… Microfinance can and should become a viable, sustainable business; it should no longer be considered as charity in another form. The poor want support for their own economic activities to generate increased earnings.
It is well known that micro-entrepreneurs are among the most energetic groups in developing countries. And we must listen to them. Nobody knows more about the impediments to finding finance than the people who experience them.
We must give them the opportunity to participate fully in economic life - and offer them the right framework in which to do it.
This is not always easy. Basic information is still lacking – such as an actual definition of poverty – and even a definition of the very terms microcredit and microfinance.
In order to find an answer to the question “who is excluded from finance?” and to build more meaningful and inclusive financial sectors for the future, the United Nations brought together a vast number of governments, bankers, academics, regulators and policymakers.
In addition, universities, non-governmental organisations – and most importantly – microfinance clients worldwide – were included. Millions of people throughout the world became involved.
And it is my belief you too are committed.
I have referred mainly to microfinance in the developing world – but before concluding – I do want to draw your attention to the fact that this financial instrument is also used in the developed world – in my country as in the rest of Europe. Yes it is on a smaller scale – and within a different socio-economic context, where a well-developed social security system and a strong banking sector exist.
But here also, microcredit is used to the benefit of the “unbankable” – those who want to start up a business and improve their situation through their own efforts. At the same time, the microfinance institutions themselves want to see a more professional approach from the would-be self-employed.
Unfortunately, the public is not widely aware of the possibilities that exist.
In closing, may I say how grateful I am to be here speaking to you today. It is my strong hope that all of you will give further thought to the issues, and share ideas on how to make financial services more accessible to the poor.
As I have said before, social and economic considerations should go hand in hand.
Only sustainable efforts lead to sustainable results. Let us combine our efforts to reach the ultimate goal – the eradication of poverty.
I look forward to talking with you on this, knowing that we can learn from one another.
My very best wishes for your future endeavours.