Microcredit Summit

 

I am deeply thankful for having been able to attend the 17th Microcredit Summit which was organized in Merida, Mexico Sept. 3-5, 2014 around the theme “Generation Next: Innovations in Microfinance with the goal of alleviating world poverty through microfinance. The idea behind this gathering is to engage delegates in a thoughtful discussion around the challenges and opportunities associated with the growth and transformation of the Microfinance sector, especially through innovative and best practices that accelerate the steps to reach full financial inclusion.

I was inspired by the general consensus among the delegates on the importance of having a new generation of leaders ( group, community, institution, public & Private… wherever they are) to understand and serve the needs of the older generation ( adequate income security, access to health care and etc.) and that that this new generation should understand how to bring together social and financial goals of any financial service provided, listen to their clients, make their governing structures reflect the clients they seek to serve and use technology in a way that alleviates poverty. This is exactly what is needed in our beloved Country South Sudan which is born as one of the poorest countries (50 per cent of the population lives below the poverty line) and where the ongoing political crisis is drastically harmful to our economy and social life.

We need to think critically on the effectiveness of microfinance as a universal tool not only to fight poverty but also to bring peace among peoples who have been living under conflict and war. It is a believe subject to further study that the simple practice of exchanging of goods and services creates a climate for social cohesion and peaceful community relations. Microfinance institutions in Rwanda and Burundi have played a major role in bringing Hutu and Tutsi together, to collaborate through micro-financing ventures. In the Democratic Republic of the Congo, many of the young people who have been demobilized from the army or former rebel groups are now business people or entrepreneurs with the benefit of loans they received from microfinance institutions.

Microfinance can also be a useful tool in post-conflict recovery, both for development and for building sustainable peace. By providing access to financial services, it can restart and boost local economic development. In addition, it can play a major role in immediate post-conflict rehabilitation assistance. Beyond these economic benefits, microfinance can be highly effective at social mobilization, empowerment, stabilization and enhancing solidarity, through social capital enhancement. Most importantly, studies show that microfinance encourages reconciliation and conflict resolution by involving cross-ethnic cooperation; for example producers and consumers interact across ethnic borders. According to Larson (2001), microfinance efforts smooth the transition to a normal life after conflict by developing social capital through solidarity mechanisms. In addition, microfinance can encourage the reintegration of refugees, returnees and demobilized soldiers, by facilitating the development of economic activities, collaboration with local populations and fulfillment of entrepreneurial spirit. Indeed, when people need to earn a living to survive, conflict becomes secondary.

I strongly believe that this is an excellent topic for research proposal.

 

Good luck.
Cheers,
Dr. Addis

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