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European Microfinance Week: Building Responsible Partnerships and sustainable practices in developing countries

Date

30 Nov 2010

Sections

Euro & Finance

Brussels 30 November 2010

This week, as microfinance actors across the globe continue to consider the wider implications of market struggles in the Indian state of Andhra Pradesh (AP), 360 microfinance professionals will come together in Luxembourg at an event organised by the European Microfinance Platform (e-MFP), to share ideas and methodology for a more responsible and sustainable approach in the sector.

The European Microfinance Week takes place at a time when microfinance is a discussion topic of global prominence. Yet for some observers current events in the industry are a reflection of mission drift from microfinance’s socially focused origins. Members of e-MFP will work together to address this question and share new practises and sustainable solutions that can ensure the continued development of inclusive financial services for the poor.

The new e-MFP publication: ‘Making microfinance investment responsible’, to be released at the event, looks at actions taken by European investors to measure or improve the social performance of their MFI investees. The principal conditions of the AP crash – a saturation of lending activity that lead to an accumulation of over-indebted borrowers – are still at risk of being recreated in other markets throughout the world where microfinance has a strong penetration. Therefore, in addition to monitoring processes, many European investors are taking proactive steps to instil stability. In ‘Making microfinance investments responsible’ e-MFP reports on procedures being introduced by investors active in Peru to combat the social risks and credit vulnerabilities associated with over-indebtedness. These include for example, credit bureau data checks and setting up early warning systems that trigger a reaction in response to indentified risk. Other activities being pursued by e-MFP members include audits, social rating and impact assessment tools. “By monitoring social indicators, investors consistently find that a strong social performance actually enhances financial performance” emphasised the Executive Secretary, Christoph Pausch.

Other issues to be covered at the European Microfinance Week 2010 are microinsurance, access to financial services through mobile banking and; in the same week as global leaders meet to forge a new agreement on climate change, microfinance actors will discuss the challenges that this phenomenon poses the industry.

Finally the 3rd European Microfinance Award will recognise innovations within ‘value chain finance’. Value chain finance is about creating access to finance along the chain that will grow to include and develop productive structures that stimulate sustainable economic growth. The winner will be announced on the 30th November in a ceremony hosted by European Investment Bank where the award will be presented by Her Royal Highness the Grand Duchess of Luxembourg.

The European Microfinance Platform invites microfinance stakeholders and enthusiasts to join the debate on the future, risks and responsibility of microfinance practises in Luxembourg on the 30 November and 1 December. We hope to see many of you there.

Founded formally in 2006, The European Microfinance Platform [e-MFP] is a growing network of over 130 organisations and individuals active in the area of microfinance. Its principal objective is to promote co-operation amongst European microfinance bodies working in developing countries, by facilitating communication and the exchange of information. e-MFP members include banks, financial institutions, government agencies, NGOs, consultancy firms, researchers and universities. For more information on the e-MFP please visit www.e-mfp.eu or contact Niamh Watters at nwatters@e-mfp.eu + 352.26.27.13.56

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