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Women and micro-credit day

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Monday, 17 October 2005

Women and micro-credit day

Small loans known as "micro-credits" are an effective tool for fighting poverty and empowering women. This was the key message of a hearing organised by four European Parliament committees on 11 October to mark International Year of Micro-Credit 2005.
The term micro-credit is used to describe a small amount of money lent to a low-income client by a bank or other institution. And micro-credits can be particularly important for women: in a world where most poor people are women, studies have shown that access to such loans can improve the status of women within the family and the community. Women become more assertive and confident, they come to own assets, including land and housing, play a stronger role in decision-making and take on leadership roles in their communities.
Most contributors in the afternoon session were women who spoke about the role of micro-credits in various parts of the world such as Latin America, Africa, Afghanistan and Asia.
Brigit HELMS, of the Consultative Group to Assist the Poor, described the development of micro-finance over the last thirty years. "From being a marginal phenomenon, next to or parallel to the traditional banking system, finance for the poor is now becoming the chief form of finance in many poor countries". Indeed, the problem of exchange rates was mentioned several times. When institutions and lenders provide loans in foreign currency, local firms are exposed to the risk of exchange rate fluctuations. Felippo VETTORATO (ETIMOS Consortium, Italy) believed that the European Commission had a key role to play in risk cover.
Andreas SCHWARZ, representing the Commission, confirmed that this was one of the priorities of the "new approach" advocated by Development Commissioner Louis MICHEL: "to become more professional in this area, especially after a report by the CGAP which claimed that the EC lacked staff specialised in banking".
Ana GOMES (PES, PT) wound up the meeting by saying there was clearly an opportunity for the EU to make its development aid more effective by improving the current state of affairs.

The CTA has published an extensive work on micro-credit in ACP countries. Check website below and the list of publications.