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19 / 07 / 2004
Juan Pablo de Laiglesia (AECI): “It is dangerous to have high expectations for microcredits”

This morning the Forum dialogues director Mireia Belil spoke at the closure of the dialogue on “Poverty, Microcredits and Development”. The following also took part in the session: Juan Pablo de Laiglesia, secretary general of the AECI (International Cooperation Agency of Spain) and Arnaud Ventura, director general of Planet Finance

More information about Poverty, microcredits and development

The secretary general of the International Cooperation Agency of Spain (AECI), Juan Pablo de Laiglesia, explained how microfinances “introduced significant changes in the fight against poverty and for development in recent decades, although there is still a long way to go.” In this respect, De Laiglesia said, “it is dangerous to have high expectations for microcredits.” “Donors may feel disappointed and thus be discouraged to invest and this would be very negative,” stated the secretary general of AECI. De Laiglesia also added that it is essential to create a legal framework and ensure access to civil, political and social rights in less developed countries.

De Laiglesia explained, “it is necessary to find ways to exchange investment for savings in order to reduce vulnerability and stabilize the capital flows of small investors.” For De Laiglesia it is essential to admit small entrepreneurs into the international financial system, since they “have been excluded until now.”

The secretary general of AECI explained some of the advantages derived from investment in microbusinesses in developing countries. In this respect he pointed out that thanks to credits, many people were able to change their business and women achieved a higher self-esteem with an overall improvement in quality of life. De Laiglesia believes that it is essential to do a follow-up of the credits granted in order for them to have an impact while ensuring faster transactions and lower interest rates that enable better and more reliable management as well as higher rates of credit payback.

De Laiglesia also spoke about the microcredits system in Spain that counts on 220 million euros and 21 lenders and over 300,000 borrowers in sixteen countries. “Our main goal is to help consolidate the offer of stable credits and adjust these to the market system,” he added. Additionally, the Spanish program aims at “introducing these communities to the banking system in order to facilitate access to finances while aiding in the startup of micro businesses without distorting the market conditions.”

Arnaud Ventura, director general of Planet Finance, explained that the current microcredit system reaches some 60 million people through 10,000 institutions fighting against poverty and for economic development. “But the potential target is of 500 million people; there is still a lot to do if we want to reach this figure,” added Ventura. Ventura explained that the involvement of both the private and public sector is essential in order to “harness resources from the market that enhance microcredits.”

Ventura believes that it is essential to gain international recognition for the importance of microcredits with the initiative such as that of the United Nations to call for an International Year of Microcredits in 2005. In this respect Ventura said “it is necessary to continue lobbying before international agencies like the World Bank, who only allot 1% of its funds to microcredits or the European Investment Bank, with only 0.1%. Ventura welcomed the recent support given by the European Commission to microcredits. The director of the Forum dialogues, Mireia Belil, stated that “we are in an ongoing process to eradicate poverty by the year 2015” and pointed out the importance of multidimensional policies to combat poverty “by making all organizations accountable internationally, locally and at the grassroots level.” For Belil, “microcredits are useful and it represents a cultural revolution, particularly with respect to equality for women.” Belil proposed that governments should back and promote these initiatives while providing a legal framework to implement them. Belil also added, “ it is necessary to gain support from the media and set clear guidelines for all the players in order to decide on an agenda that will help us make an effective strategy.”