Microfinance and Microcredit

"The great challenge before us is to address the constraints that exclude people from full participation in the financial sector... Together, we can and must build inclusive financial sectors that help people improve their lives."

-Kofi Annan, UN Secretary General

Microfinance is the supply of loans, savings, and other basic financial services to the poor. It encourages and helps meet the needs of small entrepreneurs at the family level and is directly related to achievement of the Millennium Development Goals.

The United Nations General Assembly designated 2005 as the Year of Microcredit to underline its importance. A good financial sector efficiently manages assets and creates economic wealth for those who have access. If low income people are to manage and grow their assets, they need access to financial services. Microfinance is only "micro" because the assets of those living in poverty are micro.

Key Facts

The overwhelming majority of people who earn less than $1 a day, especially in the rural areas, continue to have no practical access to formal sector finance
Poor people need a variety of financial services, not just loans
By supporting women's economic participation, microfinance helps to empower women, thus promoting gender-equity and improving household well-being
By reducing vulnerability and increasing earnings and savings, financial services allow poor households to make the transformation from "every-day survival" to "planning for the future."

Our Response

PPAF is working in pilot countries to help build and support microfinance institutions and ascertain the potential relations of remittances and microfinance. The foundation has signed a memorandum of cooperation with the UN-INSTRAW (Institute for Training and Research for the Advancement of Women). The significant role of women as senders and receivers of remittances is a major concern of UN-INSTRAW. PPAF also collaborates with the US-based National Money Transmitters Association. We are currently active in the Dominican Republic and Madagascar to increase the availability and productive use of microfinance. See project descriptions under Where We Work.

"The United Nations can only do its job properly with partners. We will need to forge even closer ties to civil society groups, foundations, academic institutions, the media, labour unions, and the private sector. Each has unique contributions to make."

-Ban Ki-moon
UN Secretary-General,
Address to UNA-USA Business Council
for the UN,
New York, 10 January 2007

Public-Private Alliance Foundation Tel: 914-478-3450 Fax: 914-478-7859 ppafoundation@gmail.com