United Nations Capital Development Fund Launches Microfinance Fund for Least Dev...

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Nov 2008
New York, United States, November, 28 2008 - The United Nations Capital Development Fund (UNCDF) is launching MicroLead - a USD 26 million fund for developing savings-led market leaders for Inclusive Finance in the Least Developed Countries (LDCs), partially funded by a grant from the Bill & Melinda Gates Foundation.

Leading microfinance institutions and other financial service providers (MFIs/FSPs) from developing countries are showing an increasing interest in expanding their operations regionally and globally. Based on proven business models these MFIs/FSPs market leaders have shown they can rapidly scale-up their operations in new countries and offer a variety of products and services to a large number of poor families and small firms. Their entry into new markets also inspires domestic MFIs/FSPs to improve their business practices resulting in an overall acceleration of access to financial services. While acting as an excellent example of South-South cooperation, at present most of these MFI/FSP market leaders are focusing their expansion primarily on non-LDC large market countries. LDCs, particularly the poorest and post-conflict LDCs, remain underserviced.

Against this background, the MicroLead Fund managed by UNCDF, with a total contribution of almost $20 million over the period 2008-2013 from the foundation, will provide loans and grants to leading MFIs/FSPs on a competitive basis to facilitate their entry into LDCs where access to finance is most challenging.

MicroLead will also have a special window for early support to post-conflict countries. By encouraging the entry of good practice MFIs/FSPs as soon as key security conditions are met, financial sectors in post-conflict countries will be able to offer an earlier scaling-up of sustainable outreach of financial services to poor families and small firms.

David Morrison, UNCDF Executive Secretary, said the creation of MicroLead presents a significant boost for building inclusive financial sectors in the LDCs. “We believe that the fight against extreme poverty through building Inclusive Financial sectors needs innovative approaches and strong interactions” he said. “MicroLead will be a key instrument in shortening the time that poor men and women and small firms in the LDCs will have to wait to gain access to savings and a broad range of other financial services”.

MicroLead will aim to reach 525,000 currently unserviced poor clients by the end of 2013, through a combination of grants and loans to at least 10 MFIs/FSPs. MicroLead will complement UNCDF’s sector development programmes - UNCDF’s primary tool for building inclusive financial sectors in LDCs. UNCDF will also contribute its significant experience from the successful global MicroStart and MicroSave programmes and strong relations with inclusive finance policy-makers in the LDCs.



Source : UNCDF
 

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