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18.11.2004 Business & Finance

Micro-credit is not charity - Busumuru Annan

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Accra, Nov. 18, GNA - Busumuru Kofi Anan, United Nations (UN) Secretary-General on Thursday said Micro-credit was not charity but a way to extend the same rights to financial services to low-income households that were available to everyone else.

He made the statement in a speech read on his behalf by Mr Alfred Salia Fawundu, UN Resident Representative and UNDP Resident Coordinator, at the launch of the International Year of Micro-credit 2005. The UN General Assembly in 1998 declared the year 2005 as the International Year of Micro-credit in recognition of the immense contribution it particularly and micro-finance as a whole, played in poverty reduction.

The observance of the year is under the theme: "Building Inclusive Financial Sector to Achieve the Millennium Development Goals (MDGs}." The UN Capital Development Fund (UNCDF) and the UN Department of Economic and Social Affairs (UNDESA) are jointly coordinating the global activities for the year.

The MDGs, is an eight-point document included in the Millennium Declaration, to which the head of governments of 192 UN Member States appended their signatures in 2000.

The ultimate target of the MDGs is to halve extreme poverty and hunger around the world by year 2015. Busumuru Annan noted that micro-finance had proved its value in many countries as a weapon against poverty and hunger and that it recognized poor people as a solution and not a problem.

"It is a way of building on the energies, ideas and visions of poor people, who are otherwise left out of the financial sector and their communities denied of their ideas and energies," he said.

Busumuru Annan called on governments, the private sector, nongovernmental organisations (NGOs) and especially financial institutions to use the International Year of Micro-credit to put millions of families on the path of prosperity, by joining in the effort to include more low-income people in the financial sector.

Dr Nii Noi Ashong, Minister of State in Charge of Economic Planning and Chairman of a 12-member committee set up to coordinate activities for the observance of the year in Ghana, noted that available statistics showed that less than 15 per cent of the population of developing countries, including Ghana, had access to traditional mainstream financial services.

He said the latest statistics from the GSS indicated that of all the industries in Ghana, 93.5 per cent were Small and Medium-Scale Enterprises (SMEs), which are clients of micro-credit providers.

"It goes without saying that for this economy to move to higher growth, the SMEs Sector and indeed the Micro-Credit Sector itself, must be supported.

"Expanding the outreach of financial services efficiently and on sustainable basis to low-income households, micro and small entrepreneurs in the rural areas is a time-tested vital developmental strategy for poverty reduction."

Ms Christy Ahenkora-Banya, Programmes Analysts at the UNDP and member of the Local Coordinating Committee for the observance of the year said activities for the celebration in Ghana would include national, regional and district level literacy week, media encounters and programmes, study tours to micro-finance institutions and projects.

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