International Year of Microcredit 2005

In 1998, the UN General Assembly declared 2005 the International Year of Microcredit in recognition of microcredit’s contribution to poverty reduction, towards achieving the Millennium Development Goals.

News | 01 October 2005
Microfinance has already made a positive impact on the quality of life of millions of poor people by providing greater access to credit, savings, insurance, transfer remittances, and other financial services, which would otherwise be unreachable. But there is still a huge gap in the availability of services. As ILO Director-General, Juan Somavia, said at the launch of the Year , microfinance institutions reach only 10 per cent of the world's poor today.

"Microcredit is about poverty reduction. And the ILO has a tremendous interest in microcredit precisely because fighting poverty is at the heart of our mandate", said Somavia. "Microcredit creates jobs. It promotes self-employment, livelihood, and it helps people expand their economic activities so they can hire others". It can also become an important part of the social safety net, and plays a critical role in empowering women.

The ILO is committed to building on the links between microfinance and decent work through its Social Finance Programme. Created in 1991, the it is a focal point to analyze, evaluate and disseminate financial sector issues relevant for employment and social justice.

In countries where the ILO works to assist in attaining compliance with core labour standards, such as the abolishment of forced labour and child labour, microfinance initiatives have played a key role. They help replace family income when a child labourer leaves work and goes to school, provide poor workers with credit to avoid slipping into debt bondage, assist women who are vulnerable to human trafficking, and help migrant workers send remittances back home through secure channels while supporting the use of those remittances for income-generating activities.

Around fifty countries have confirmed their participation in the Year. Dozens of outstanding economists, bankers and financiers agreed to enter the Group of Advisors for the International Year of Microcredit 2005.

Russia is represented by Diana Medman, director of the Bioprocess joint stock, founder of the Women’s Microfinance Network. "I'm pleased to be a part of the overall effort to provide microfinance to poor and low-income people, which gives women everywhere the power to play more prominent roles in their communities," she said.

Every country-participant set up national committees to mark the Year. In Russia it was created under the aegis of the Economic Development and Trade Ministry. National committees were also set up in Azerbaijan (, Kazakhstan , Uzbekistan (, Belarus and Georgia.

In Eastern Europe and Central Asia ILO has pioneered several microfinance initiatives, including start-up financing for new entrepreneurs – graduates of the Start and Improve Your Business Programme (SIYB), and the assessment of microcredit schemes in Kyrgyzstan and Kazakhstan.