Statement of the Advisors Group to the United Nations International Year of Microcredit 2005

This note contains the collective views of the twenty members of the Advisors Group, and is a result of their meetings and conversations during the UN Year of Microcredit. It makes a number of key observations arising from the UN Year and sets out recommendations for further action.

The note states that:

• The United Nations International Year of Microcredit has been a resounding success;
• It has raised the profile of microcredit and microfinance;
• It has led policy makers to understand the critical role that access to financial services plays in reducing poverty.

The note lists the observations made by the Advisors Group, which include:

• There is a lack of reliable data about access to financial services for the poor;
• An inclusive financial sector is a driving force of economic development and poverty reduction;
• Government ownership of the financial sector is inversely correlated with access;
• Financial services are more likely to be available to poor people in countries that are well-governed;
• MFIs are being overly constrained by regulations.

The note recommends that:

• National governments adopt common indicators and methodologies to assess the breadth, depth and inclusiveness of their financial sectors;
• Financial sector authorities devise appropriate means for microfinance providers to qualify to accept deposits;
• Governments:
  • Play an enabling role in increasing access to financial services;
  • Do not impose interest rate ceilings on micro-lenders;
  • Give priority to training.