Nearly three billion poor people in developing countries lack access to the basic financial services – such as a small loan or a safe place to save – needed to help them manage their precarious lives. At the core of microfinance is a fundamental belief that access to financial services empowers the poor by reducing their vulnerability and giving them choices. Whether they save or borrow, evidence around the world shows that when poor people have access to financial services, they choose to invest these savings or loans into building a range of assets that will make them less vulnerable. Such assets can be sending their children to school, buying medicines and more nutritious food, fixing a leaky roof, or building income-earning potential by investing in their own enterprises. In essence, access to financial services enables poor people to build their own way out of poverty. (About CGAP 1/2).
Key Principles on Microfinance;
There is nothing “micro” about poverty: The numbers astound: one in two human beings lives on $2 a day, or less. As many lack public sanitation. Two billion want for electricity, a billion more for clean water. The challenge is immense, but the fight against poverty often begins at the smallest level … (full text);
(About CGAP 2/2): Who We Are: CGAP is a consortium of 33 public and private funding organizations – bilateral and multilateral development agencies, private foundations, and international financial institutions – working together to expand poor people’s access to financial services.
CGAP was established in 1995 by nine leading development agencies and microfinance practitioners to support the development of a sustainable microfinance sector. Today, CGAP serves a global resource center for microfinance, providing advisory services and information to a wide range of stakeholders.
In fiscal year 2007, CGAP undertook a comprehensive evaluation of its work and the impact of its work. We embarked on a far-reaching review of CGAP and the community we serve. The review included an independent evaluation, surveys, focus groups, and virtual conferences. The result was a clear vision of who we are and what roles we are best positioned to serve into the future. CGAP’s strategy for 2008 and beyond builds on CGAP’s strengths and the opportunities we see in advancing the microfinance industry.
Our Mission: The overarching goal of CGAP is to help build inclusive financial systems that serve the poor, with a particular emphasis on building local, deposit-driven markets. Our strategy focuses on ensuring that those local financial markets are equitable and efficient, and that finance for the poor is fully integrated into mainstream markets.
By equitable, we mean ensuring that the increasing commercial focus of microfinance does not leave poor people behind; that subsidies are equitably allocated; that loan and other service costs, terms, and practices are competitive, ethical, and transparent; and that sound business practices are respected.
By efficient, we mean making financial services more available to poor people by lowering transaction costs through technology, competition, and more effective aid delivery.
Sound and deep market infrastructure, good information, and policies that stimulate access to finance while protecting poor clients are critical to efficient and equitable domestic financial markets.
Who We Serve: CGAP serves three groups of clients – financial service providers, public and private funding organizations, and government policymakers and regulators – that are engaged in building inclusive financial systems. Of course, the poor who use microfinance – and those who don’t yet have access to financial services – are the ultimate clients we seek to serve.
What We Do: … (full text).