Micro financing is an effective tool for poverty alleviation
October 31st, 2008
Mr Kurt Koenigsfest, Chief Executive Officer of the first Micro Finance Institution in the World, Bankosol in Bolivia, on Thursday pointed out that giving out micro finance was one of the most effective ways to reach the very poor in society.
He said micro-financing provided an opportunity for poor people to develop themselves out of their necessity by helping them to do basic things like educating their children and giving their families access to quality life.
Mr Koenigsfest said this at a press conference ahead of the official opening on ACCION International, a U.S based private, non-profit organization with the mission of giving people the financial tools they need to work their way out of poverty.
Micro-finance is a credit facility that gives out money to poor people engaged in small and medium scale businesses to help them grow their business.
He explained that Bankosol, which was established 22 years ago, had benefited from the support of ACCION International.
ACCION International is opening a hub in Ghana to give technical support and invest in micro credit financial establishment.
The organization has partnered with Ecobank Trans-national Incorporated in Ghana to form a non-financial institution called EB-ACCION to reach out to Ghanaians who do not usually have access formal banking services.
Mr Anthony Osei Akoto, Minister of State at the Ministry of Finance and Economic Planning, said poverty was still a debilitating condition suffered by millions in Africa and acted as a handicap to the development of the continent and its people.
“Here in Ghana, poverty is hindering the growth of the economy, particularly in the informal financial sector which encompasses 80 percent of the working population.”
Mr Osei Akoto said the government had adopted micro finance as one of the strategies in the development of the informal private sector since it had the capacity to give millions of people access to financial services they needed to change their lives.
“Microfinance institutions here in Ghana are making great strides in giving people in the informal sector access to financial services.”
The Minister noted that micro financing was difficult but expressed confidence that ACCION would continue to improve the lives of millions of Ghanaians and Africans who simply needed a helping hand to climb out of the hole of poverty.
“I have no doubt that the success of ACCION international in Latin America, Caribbean and Asia will be replicated in Africa and I am even more encouraged by the partnership with Ecobank.”
Ms Maria Otero, President and Chief Executive Officer of ACCION International, said the opening of an African hub office and training centre would help the organization to broaden their outreach.
“ACCION’s goal within the next three years is to double the number of poor entrepreneurs it helps to reach worldwide with microfinance from three million to six million people.”
Mr Patrick Akinwuntan, Executive Director, Operations, Technology, Transaction and Retail Banking at Ecobank Trans-national Incorporated, explaining the role of EB-ACCION in Ghana, said the institution was launched early this year to help Ecobank get access to about 70 per cent of the un-banked in Ghana.
Un-banked people are those who do not save or have any business transaction with a banking establishment.
He said: “Ecobank has the capacity to make a real difference in the lives of the economically active poor who have traditionally been sidelined by commercial banks.”
Mr Akinwuntan said the bank had plans to expand the network into Benin, Senegal and Cameroon next year and in the next five years launch the services in 20 countries.
Mrs Frances Adu-Mantey, Managing Director of EB-ACCION, said so far their operations had been successful and the response from people had been overwhelming.
She said their branches were in market places to enable market women have easy access to the place and announced that they had four branches operating but intended to open a fifth branch at Kaneshie Market by mid-November.