Dignitaries who attended the 1997 Microcredit Summit.
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>>Authored by Larry Reed, Director, Microcredit Summit Campaign
Twenty years ago Sam Daley-Harris came to our offices at Opportunity International — where I then worked — and told us of his plans to hold a Microcredit Summit. Working with Muhammad Yunus, founder of Grameen Bank and John Hatch, founder of FINCA, he would gather leaders from around the world to inform them of the important role microcredit and other financial services could play in helping people living in poverty. At the time, neither the UN nor the World Bank nor any national governments had any policies related to microfinance. Sam wanted to change that.
We were intrigued by his idea, so we started asking more about his organization. He represented a grassroots lobbying group called RESULTS, which mobilized citizen volunteers to advocate for issues related to poverty and hunger to their representatives in Congress. He told us about how, in 1990, RESULTS volunteers had held 500 candlelight vigils around the country to support the World Summit for Children.
We left the meeting excited by the prospect but not sure whether Sam was going to be able to pull off such a big event. We went back to our own agendas and didn’t give much thought to the Summit until a month or two before the event when we began to notice that all our conversations with colleagues in microfinance included discussions about the upcoming Summit. Everyone we knew was planning to go, and when we looked at the line-up of speakers, we saw why.
Sam and the RESULTS team had somehow convinced five heads of state, even more spouses of heads of state, the President of the World Bank, the Treasury Secretary, and many heads of UN agencies to speak at the first Summit in Washington. We started scrambling to figure out how we could get noticed at what was becoming the largest international event ever organized for microcredit.
The participants in the first Summit endorsed the goal of reaching 100 million of the world’s poorest families with microcredit by 2005. This became the focus of the first phase of the Microcredit Summit Campaign, expanding the use of microcredit as a development tool as widely as possible. When the Campaign first started tracking microfinance outreach in 1997, our industry was reaching 13 million borrowers, of whom 7.6 million lived in extreme poverty.
During the next nine years, according to David Roodman, the Microcredit Summit Campaign served as “a major force behind the global microfinance movement, combining savvy publicity with behind-the-scenes lobbying for funding.” After coordinated lobbying by RESULTS and their allies around the world, the UN declared 2005 to be the “International Year of Microcredit,” and the Norwegian Nobel Committee awarded its 2006 Peace Prize to Muhammad Yunus and the Grameen Bank. By 2007, the Campaign had reached its goal, reporting 155 million total microfinance borrowers, of whom 107 million were among the poorest in their countries.
Anticipating reaching the goal, the Campaign entered its second phase by setting two new goals at its 2006 Global Summit in Halifax:
- Reaching 175 million poorest families with microfinance
- Helping 100 million families lift themselves out of extreme poverty
With these new goals, the Campaign began focusing not just on the number of clients, but also on how access to microfinance affects the lives of families who borrow. We stressed the importance of measuring poverty levels of clients and recording progress over time, framing micro financial services as tools to help achieve the larger goal of ending extreme poverty.
In many ways, this message has become more widely accepted. The World Bank has made ending extreme poverty by 2030 and promoting shared prosperity its two guiding goals. As a key step to achieving these goals, the Bank has also adopted a target of reaching universal financial access by 2020. The UN Sustainable Development Goals (SDGs), ratified by 193 nations this past January, have adopted the target of eradicating poverty, in all its forms, everywhere. Making a broad range of financial services available to all is one of the key targets for achieving the SDGs.
On the other hand, we have not had as much success in getting financial providers to expand service to the world’s poorest. As microfinance has grown more commercial, it has served proportionally fewer clients in extreme poverty. In fact, our numbers show that the number of borrowers living in extreme poverty has declined for each of the last three years. These trends, combined with a funding environment that has much less appetite for organizations providing public goods for microfinance, has caused us to rethink our role and structure.
In our last State of the Campaign Report, we identified Six Pathways for microfinance to reach those in extreme poverty and support their movement out of poverty. These Pathways all involve integrating financial services with other important development services, and many of them have significant connections with the work of governments.
At our most recent Summit in Abu Dhabi, our Leadership Council identified four priorities to help drive the future of our work on financial and social inclusion. These include transformative social protection and graduation programs, risk management by the poor, community-led finance, and rural development strategies. What they all share in common is the aim to help people move out and stay out of extreme poverty, addressing their unique vulnerabilities and combining public and private action to make essential services available to and affordable for those living in poverty.
We saw that our future work as the Microcredit Summit Campaign would have significant overlap with the work of our parent organization, RESULTS Educational Fund. As we called for governments and multilateral organizations to tear down the silos in their organizations to combine financial services with other developmental services like social protection, health, housing, and education, we saw that we needed to do the same thing in our own organization. Therefore, in order to strengthen our message and reduce annual recurring costs, we have decided to merge our work with that of RESULTS.
In this new structure, the Microcredit Summit Campaign will no longer operate as a standalone organization. Much of our team will be moving into positions with RESULTS, and we will continue to highlight the work carried out by innovators and leaders who design financial services that reach those in extreme poverty and that can show progress in helping families move out of poverty.
We will continue to advance the priorities of our Leadership Council, integrating them into the work RESULTS does to advocate for policies and resources to eliminate poverty through its three pillars of health, education, and economic opportunity.
Through RESULTS, we will continue to play our unique convening role. We will bring together the ever expanding community of institutions, companies, government agencies, and individuals that can provide the financial and other goods and services that address the unique needs of those living in poverty.
We now embark on the third phase of the Campaign. It will involve an advocacy agenda to link financial services to other key development services so that those living in poverty will have the resources and cash flows needed to provide for themselves, sustain the health of their families, and educate their children. We do so with the same audaciousness that Sam had when he started both RESULTS and the Microcredit Summit Campaign. We do so knowing that we will not succeed until extreme poverty no longer exists on our planet.
Read the official announcement: An Update from Joanne Carter, executive director of RESULTS and RESULTS Educational Fund, and Larry Reed, director of the Microcredit Summit Campaign
See answers to common questions (French and Spanish) that we anticipate you may have. If you have other question we didn’t think of, send an email to info@microcreditsummit.org.
