Microcredit and microfinance are important poverty reduction tools - Annan
4 September Microcredit and other financial services for poor people are important instruments for poverty reduction and for empowerment, especially for women, according to a report prepared by United Nations Secretary-General Kofi Annan for the upcoming General Assembly session.

"Observance of the International Year of Microcredit provides a significant opportunity to raise awareness of the importance of microcredit and microfinance in the eradication of poverty, share good practices and further enhance programmes that support sustainable pro-poor financial sectors around the world," Mr. Annan says of the year, to be observed in 2005.

"Expanding outreach can contribute to achieving the goals of the major conferences and summits as well as the Millennium Development Goals, particularly targets related to halving the proportion of the people living in extreme poverty by 2015, and promoting gender equality and empowerment of women," he adds.

The General Assembly had requested a report on the implementation of the first UN Decade for the Eradication of Poverty (1997-2006) and a draft programme of action for the International Year of Microcredit.

Mr. Annan recommended that the Assembly invite the World Bank, the Consultative Group to Assist the Poor, the UN Capital Development Fund and relevant organizations of the UN system to establish a working group to prepare recommendations for stimulating sustainable, pro-poor financial sectors.

On the implementation of the Decade for Poverty Eradication, the Secretary-General said that progress had been patchy and uneven, noting that "while there has been progress in faster growing developing countries on many fronts, the poorer developing countries, where economic and social development is most needed still lag behind."

Some fresh developments and results did point toward progress, he added, stating that those efforts were worthy of concerted support at the regional and international levels. "If these efforts can be sustained and leveraged, the political and social environment that emerges will provide a sound and stable basis for economic and social development that will contribute to the achievement of the Millennium Development Goals," he added.

Hari Srinivas - hsrinivas@gdrc.org
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