MICROCAPITAL STORY: The Microcredit Summit Campaign Announced that Microcredit Reached More than 106 Million of the World’s Poorest in 2007

The Microcredit Summit Campaign revealed that more than 106 million of the world’s poorest received a microloan in 2007. The finding is a product of the Microcredit Summit Campaign’s annual survey of microfinance institutions (MFIs) around the world. The 106 million are made up of individuals who, at the time of receiving their first loan, were either at the bottom half of those below their nation´s poverty line, or living on less than USD 1 per day (adjusted for purchasing power parity).

The Microcredit Summit Campaign is made up of microcredit practitioners, advocates, educational institutions, donor agencies, international financial institutions, non-governmental organizations, and other organizations. The original goal of the Campaign was to reach 100 million of the world´s poorest with microcredit by 2005. The goal was set when 3000 delegates gathered in Washington DC for the first Microcredit Summit in 1997. At the time the goal was set, fewer than eight million individuals living in poverty had access to microcredit. Between 1997 and 2007, that number increased by more than 1300 percent.

Despite reaching the target two years late, Nobel Peace Prize Laureate and founder of the Grameen Bank, Muhammad Yunus said, “This is a tremendous achievement that many people thought was far too difficult to reach… What makes it even more remarkable is that loans to more than 100 million very poor families now touch the lives of more than half a billion family members around the world. That is half of the world’s poorest people.” Also present at the announcement were Sam Dailey-Harris, the Director of the Microcredit Summit Campaign, and Ingrid Munro, founder of Jamii Bora, a microfinance institution that operates primarily in the slums of Nairobi, Kenya.

The Microcredit Summit Campaign has been collecting data on the global microfinance industry since 1998, and conducting a third party verification process since 2000. The State of the Microcredit Campaign Report 2007 describes the data collection process (page 19). The first step is the circulation of Institutional Action Plans (IAPs) to thousands of MFIs worldwide. The IAPs ask for the institutions most recent data: active borrowers; the percentage of borrowers that are women; total number of clients that fit the Campaign´s definition of “poorest” when they received their first loan; percentage of “poorest” clients that have crossed the poverty line; number of savers; average loan size of first loan; percent operational self-sufficiency; etc. After sending out the IAPs they conduct a phone campaign to encourage submissions, and verify any questionable data by corroborating with associated third parties such as donor agencies. Finally they compile and analyze the data and write the report.

The Microcredit Summit Campaign is a product of the RESULTS Educational Fund, a US based non-profit that performs research and oversight of global anti-poverty programs, as well as campaigns to increase antipoverty awareness. In 2007, Results reported revenues of USD 25.9 million. The Clinton Global Initiative is another supporter of the campaign, and contributed a USD 100 thousand grant in 2007. A new fundor of the Campaign is the Bill and Melinda Gates Foundation, who as reported by MicroCapital, gave the Campaign a grant of USD 700 thousand in January 2009. Further financial information is not publicly available.

With its first goal of reaching 100 million low-income people with microcredit achieved, the Microcredit Summit Campaign is set on two new goals that were initiated at the 2006 Microcredit Summit in Halifax: (1) “Working to ensure that 175 million of the world’s poorest families, especially the women of those families, are receiving credit for self-employment and other financial and business services by the end of 2015”; (2) “Working to ensure that 100 million families rise above the USD 1 a day threshold adjusted for purchasing power parity (PPP), between 1990 and 2015.”

Microcredit Summit Campaign´s Partner MFIs:

Association of the Asian Confederation of Credit Unions (ACCU), Thailand

Association for Social Advancement (ASA), Bangladesh

BRAC, Bangladesh

FINCA International, USA

National Bank for Agriculture and Rural Development, (NABARD), India

Opportunity International, USA

SHARE Microfin Ltd., India

Spandana, India

Samurdhi Authority, Sri Lanka

Vietnam Bank for Social Policies, Vietnam

Central People’s Credit Fund, Vietnam