The Microcredit Summit Campaign, a project that was launched in 1997 by US-based nonprofit advocacy group RESULTS Educational Fund (REF), recently released the State of the Microcredit Summit Campaign Report 2011, a plenary account of the recent trends, challenges and achievements in the microfinance industry, at the National Press Club in Washington, DC. The report indicated that 128 million poor people received microloans in 2009, more than was recorded in any of the organization’s previous reports. In 1997, 7.6 million were estimated to have received microloans.
The report also announced the development of the Seal of Excellence for Poverty Outreach and Transformation in Microfinance, a designation that will recognize microfinance institutions (MFIs) that “do the most” to assist families in helping themselves out of poverty. Chuck Waterfield, founder of US-based nonprofit MFTransparency, elaborated on the need for the Seal: “With such incredible growth in microfinance there is a need for some certification, some objective measurement that makes it clear to the outside world that these are the goals of those microfinance institutions that are committed to reducing poverty and these are the institutions reaching those goals.”
The report continues with a debate on the relentless topic of whether or not MFIs should operate on a for-profit basis. In the report, leaders from Banco Compartamos and SKS Microfinance, two for-profit MFIs based in Mexico and India, respectively, argue that commercial financial support and profit generation are crucial ingredients to the success of microfinance. Critics of the viewpoint offer counterarguments in the reports as well, citing possible long-term consequences of negative publicity from recent cases of abusive collection practices .
By John Howard-Smith, Research Associate
About Microcredit Summit Campaign: Microcredit Summit Campaign is a project that was launched by RESULTS Educational Fund (REF), a nonprofit advocacy group based in Washington, DC, in 1997. The campaign’s mission is to help 100 million people rise above the international poverty line of USD 1.25 a day by 2015. The campaign also aims to bring financial and business services to 175 million people, especially women, by 2015.
 Microcredit Summit Campaign Press Release: “Record 128 Million of World’s Poorest Received a Micro-Loan in 2009”, http://www.microcreditsummit.org/news/
MicroCapital.org Special Feature, October 15, 2008: “MICROCAPITAL SPECIAL FEATURE: Mohammad Yunus and Michael Chu Debate Profiting from Poor People at the Worldwide Microfinance Forum”, http://www.microcapital.org/microcapital-special-feature-mohammad-yunus-and-michael-chu-debate-profiting-from-poor-people-at-the-worldwide-microfinance-forum/
MicroCapital.org Paper Wrap-Up, February 2, 2009: “MICROCAPITAL PAPER WRAP-UP: The State of the Microcredit Summit Campaign Report 2009, by Sam Daley-Harris”, http://www.microcapital.org/microcapital-paper-wrap-up-the-state-of-the-microcredit-summit-campaign-report-2009-by-sam-daley-harris/
MicroCapital.org story, November 23, 2010: “MICROCAPITAL BRIEF: Finance Minister of India Vows Not to Strangle Indian Microfinance Industry”, http://www.microcapital.org/microcapital-brief-finance-minister-of-india-vows-not-to-strangle-indian-microfinance-industry/
MicroCapital.org story, January 27, 2011: “MICROCAPITAL BRIEF: Microcredit Summit Campaign of RESULTS Educational Fund (REF) Releases Report, “Number of Microcredit Clients Crossing the US $1.25 a Day Threshold During 1990-2008, Estimates From a Nationwide Survey in Bangladesh” http://www.microcapital.org/microcapital-brief-microcredit-summit-campaign-of-results-educational-fund-ref-releases-report-number-of-microcredit-clients-crossing-the-us-1-25-a-day-threshold-during-1990-2008-estimates-fro/
MicroCapital’s Microfinance Universe profile: Microcredit Summit Campaign, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microcredit+Summit+Campaign
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