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Microcredit Financing Campaign Nears Achieving Massive Goal - 2003-10-24

A report due out next month indicates that the international campaign for microcredit financing is well on its way to achieving the goal of helping 100 million of the world's poorest by the year 2005.

U.N. statistics indicate that about 20 percent of the world's citizens exist on less than one dollar a day. The idea of the Microcredit Summit Campaign is to encourage the establishment of more places in the developing world where people can get small loans to help the poorest help themselves to work their way out of poverty.

Campaign director Sam Daley-Harris said the situation report, which will be released early next month, shows the campaign is nearly halfway toward reaching its target by the 2005 deadline.

"Our goal is to reach 100 million of the world's poorest families, especially women, with credit for self-employment and other financial and business services," he said.

Mr. Daley-Harris said providing start-up loans to individuals or small groups has become a cost-effective tool for attacking poverty. "The U.N. Millennium Development goal of cutting absolute poverty in half by 2115 cannot be achieved with sustainable micro-finance for the very poor as a pillar. Not the only, but one pillar."

Mr. Daley-Harris said institutions handling microcredits in Bangladesh, for example, are reaching more than ten million of the country's poorest citizens.

The report's author noted that seven in ten small loans are provided to women. And that, he said, is not a coincidence. "Number one, in fact, women are better at repaying their loans. Number two and perhaps more importantly, the proceeds from her enterprise accrue more to the children and the family when the loan comes in through the woman than they do when it comes in through the man. So if your commitment is the transformation of poverty, then the higher value comes through the loan that's provided to the women."

Mr. Daley-Harris said the microcredits can benefit more than just the recipient. "It's not just you get a $50 loan so now you're $50 richer until you pay it back. No, it spills over to others in the community, as you buy better and more food, as you fix your house, get better health. It really spills over," he said.

Mr. Daley-Harris said the use of microcredit has gained wider support from international leaders, non-government organizations, the World Bank and other development-oriented institutions.