MicroCapital: Why was “Inclusive Finance for Food Security & Nutrition” chosen as the topic of this, the 14th edition of the European Microfinance Award?
Christoph Pausch: For a long time, it looked like progress in this field would be positive and continuous. But a combination of factors – among them climate change, the COVID-19 pandemic and the global inflationary context – means that progress in food security and nutrition may have stalled, or in fact reversed. According to the World Food Programme, “Conflict, economic shocks, climate extremes and soaring fertiliser prices are combining to create a food crisis of unprecedented proportions.” And the Food and Agriculture Organization reports that the number of people affected by hunger has grown by 150 million since the onset of the pandemic. But the problem is not only one of hunger – lack of access to sufficient food – it’s also one of insufficient quality, meaning poor nutrition, and lack of access to the micronutrients necessary for good health, all compounded by the stress of uncertain supply. There may be 2 billion people worldwide in this category.
There are many sectors that have to play roles in addressing food security and nutrition. And because the people most vulnerable to food insecurity and malnutrition are largely those who are low-income, living in low-income countries and financially excluded, there is a vital role for the financial inclusion sector.
MC: What type of initiatives are you expecting to see?
CP: Obviously, months of research and consultation has preceded the launch of the Award, and the e-MFP team is enormously grateful for the time and expertise so many people have given us in preparing the materials for the application round. But there is plenty of mystery as well – we don’t know fully what types of organisations will apply and what initiatives we will see! What we know for sure is that food security and financial inclusion are intrinsically related, and the core building blocks of financial inclusion – helping people plan, save, mitigate shocks, invest, and “smooth” their income and expenditure – are all positively linked to access to and affordability of sufficient quality food. We expect and hope to see initiatives on both the demand and supply sides – meaning both in facilitating the production and distribution of food, but also in safeguarding and increasing access to food for vulnerable clients, whether in rural or urban areas. We recognise too that inclusive finance – and specifically microcredit – can, in the wrong context, be detrimental. What happens when a poor family is struggling to put food on the table but knows that failing to make a repayment of a microloan will prevent further access to finance? Do they cut back on food, including for their children? So, financial inclusion organisations need to not only help, but also ensure they “do no harm.” This is as important a response to food insecurity as initiatives aimed at increasing food availability and improving nutrition.
MC: What will the evaluation committees be looking for?
CP: The objective of this year’s award is to highlight innovations by financial inclusion organisations to safeguard access to quality and affordable food for vulnerable populations and to increase the resilience of sustainable food systems. You can see that there is a lot to unpack there, and all of it is important – from the innovations to the element of resilience to the safeguarding of access. As for the process, it is, as always, a multi-stage and rigorous evaluation conducted by a series of committees. Of course, there are eligibility requirements to be met first, but the pre-selection committee in the first round will primarily be looking for an applicant’s real understanding of the food security context and challenges, a clear and strategic response to these, and a serious mechanism for measuring impact and outcomes.
MC: Who can apply for the Award this year?
CP: We hope for and expect a diverse field of organisations. Like in previous years, we have sought to be as expansive as possible in the eligibility criteria. An applicant organisation has to be active in the financial inclusion sector, have been fully operational for at least two years, with the relevant initiative active for at least one year, and it must be based and operate in a Least Developed Country, Low Income Country, Lower Middle Income Country or an Upper Middle Income Country. All the eligibility requirements and the application and evaluation processes can be found on the European Microfinance Award website.
MC: What are the benefits to potential applicants of taking part in the Award?
CP: As before, there is a significant financial prize (EUR 100,000 to the winner and EUR 10,000 to each of two other finalists) generously provided by the Luxembourg Ministry of Foreign and European Affairs – Directorate for Development Cooperation and Humanitarian Affairs. This is undoubtedly a substantial incentive, but we’ve seen over the many years we’ve been doing this that maybe as much benefit comes in the exposure that the 10 semi-finalists (and finalists, and especially the winner) all get via international and industry press coverage; e-MFP’s annual publication, which profiles all the semi-finalists and extracts the key factors for success from their initiatives; and connections to e-MFP’s extensive network of stakeholders working all over the world, as well as donors, investors and various potential partners who pay attention to the outcome of this Award. And on top of that, e-MFP organises various events throughout the following year to further profile the initiatives involved in the Award.
Christoph Pausch is Executive Secretary of e-MFP. The EUR 100,000 European Microfinance Award is jointly organised by the Luxembourg Ministry of Foreign and European Affairs – Directorate for Development Cooperation and Humanitarian Affairs, e-MFP and the Inclusive Finance Network Luxembourg. Applications for the (short) first round of the European Microfinance Award opened on March 15 and close on April 12 at 23:59 CET. The winner will be announced during a ceremony on November 16, during European Microfinance Week 2023. For more information and to apply, please visit https://www.european-microfinance-award.com/.
This feature is the first in a sponsored series on European Microfinance Week 2023, which will take place in Luxembourg and online from November 15 through November 17. MicroCapital has been engaged to report on the conference each year since 2012.
Additional Resources
European Microfinance Award homepage
https://www.european-microfinance-award.com/
European Microfinance Week 2023 webpage
https://www.e-mfp.eu/european-microfinance-week-2023
MicroCapital coverage of European Microfinance Week since 2012, including the European Microfinance Award
https://www.microcapital.org/category/european-microfinance-week/
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