Jason Wood (La Trobe, Liberal Party) Share this | Hansard source

I move this motion to urge the Australian government to send the appropriate minister and appropriate shadow minister to lead an Australian delegation to the Asia-Pacific Regional Microcredit Summit in Bali in July 2008. I have spoken previously in this place about the importance of microcredit. In 2006 I spoke in support of a matter of public importance raised by the member for Kingsford Smith calling for the Australian government to set the goal of 175 million people receiving microcredit by 2015 and increase microcredit funding to 1.25 per cent of the Australian aid budget.

Last month I was approached by RESULTS Australia to keep the issue of microcredit moving. I thank and congratulate them for their advocacy on such an important cause and their persistence in keeping it a regular part of the national debate. Specifically I would like to mention the RESULTS Australia staff, including national manager Maree Nutt, research coordinator Mark Wright, president Ian Sampson and my local RESULTS members, Emmanuelle Emile-Blake and Anne Herbert, who visited me with photographer Damien Schumann, who is from South Africa.

Microcredit is the provision of low-interest loans and other financial services such as savings and insurance to impoverished people unable to borrow through ordinary channels. These loans enable borrowers in poverty to expand or establish small businesses like waste recycling and animal husbandry. Evidence from many microfinance programs around the world indicates that borrowers can profoundly improve the quality of their lives and futures of their children. Extra money earned is used to obtain better food, housing and education. Microcredit projects supported by the Australian government through AusAID have helped tens of thousands of poor households in countries like Bangladesh, China, Indonesia, Papua New Guinea, the Philippines and Vietnam.

It has also been an extremely effective strategy elsewhere. The Microcredit Summit Campaign launched in 1997 had the original goal of ensuring that 100 million of the world’s poorest families, especially the women of those families, had access to credit and other financial services by the end of 2005. By December 2006, the campaign had just fallen short of this goal: 93 million of the poorest families had access to credit at this time, which is still a fantastic effort. Nevertheless, the number of the poorest families with access to credit has increased twelve-fold, or 32 per cent per year, from 1997 to 2006—a tremendous effort.

Each year the civil society driven Microcredit Summit Campaign has tracked its own progress. This year reports found that in 2006 alone 133 million families received a microloan and 93 million of those families were among the world’s poorest people—people like Joyce Wairimu and Wilson Maina from Nairobi, Kenya. Eight years ago Joyce was a beggar in one of the world’s slums in Nairobi. Her climb out of poverty started with the loan of less than $30. She used the loan to start a small business to earn an income. Today she has six businesses and 62 employees. Wilson Maina was one of the most wanted criminals in the same Nairobi slum as Joyce. He has borrowed 17 times from a microfinance organisation known as Jamii Bora, meaning ‘Good Families’. Since his first loan of $25, he now has four businesses and has convinced hundreds of young men not to get involved in crime.

These are but two of the stories from microfinance organisations. Jamii Bora’s work was highlighted in the recent report from the Microcredit Summit Campaign, a project of the US based RESULTS Educational Fund. In 2006 the campaign adopted phase 2, involving additional goals to ensure that the expansion of microfinance leads to significant reductions in poverty. The first new goal is to further expand the number of very poor borrowers to 175 million by 2015. The second goal aims to ensure an additional 100 million families, which were among the poorest in 1990, have moved to above US$1 per day by 2015.

This goal will make a significant contribution to achieving the first of the Millennium Development Goals, to reduce absolute poverty by half by 2015. I believe it is vitally important that the new Labor government support the achievement of these goals going forward. The focus of the Microcredit Summit Campaign is on ensuring that the growth of microfinance both targets the poorest people and includes regular monitoring of how many borrowers are moving above the poverty line. Already 15 microfinance organisations and networks, mostly in Asia, have committed to measuring accurately the number of their borrowers moving above the poverty line in the period to 2015.

It is important for countries providing aid to microfinance, such as Australia, to increase funding to enable the expansion of newer microfinance organisations and the accurate measurement of how many borrowers are moving out of poverty. The Asia-Pacific region contains 64 per cent of the world’s population who live in absolute poverty, and as such it has a large unmet need for credit and other financial services. The Bali summit is a significant opportunity to examine ways to expand the use and effectiveness of microfinance in the region and to realise the government’s policy objective of reducing poverty in the Asia-Pacific region.

2006 Nobel Peace Prize winner Muhammad Yunus, who founded the microlending institution Grameen Bank, will be attending the Bali summit, as will leaders and innovators in the field of microfinance including those from Pakistan, Bangladesh, Samoa, Vietnam and Indonesia. Moreover, there are speakers from the World Bank and the commercial banking sector. It is therefore very important that the Australian government is represented at this forum to engage actively in the lively debate about microcredit, which is bringing poor people across the world renewed hope and is gathering momentum in its fight against global poverty.

The Nobel Peace Prize highlighted that financial services for the poor are an important part of the tool kit for enabling poor people to improve their lives. These services include affordable and collateral-free credit, safe and flexible deposit taking and microinsurances against illness, death and natural disasters. There is no question that microfinance has captured the interest of philanthropists and financial institutions. Bill and Melinda Gates, eBay founder Pierre Omidyar and—closer to home—banks like ANZ, NAB and Westpac have made considerable investments in this area. But, as financial services to the poor become good corporate business for some, the Microcredit Summit Campaign has continued to urge microfinance and mainstream institutions to also reach down to poorer clients. These are clients whose families are on less than US$1 a day and whose children are likely to be the faces behind the daily statistics of almost 30,000 of them dying from poverty related causes, which is an absolute tragedy and involves sadness we in this country just could not imagine.

It remains to be seen if the Rudd government will facilitate the long-called-for expansion of microfinance in our overseas aid budget programs and take up the additional challenge, as the US has in its aid program, of also reaching down to the poorest families. As stated in this year’s Microcredit Summit Campaign report, it remains to be seen if new World Bank President Robert Zoellick will heed the recent request from the US Congress to increase World Bank spending on microfinance and ensure that half of this funding reaches those living on less than US$1 a day. Over 1,000 parliamentarians across seven countries, including Australia, had the same request ignored by both of Mr Zoellick’s predecessors.

Critics of microfinance for the very poor cannot argue with the outcomes from Jamii Bora—from 50 beggars in 1999 to 170,000 savers and 60,000 borrowers in just eight years. If countries like Australia participate in the promotion of microcredit, the end of extreme poverty in our lifetime may well be within our sights. Once again I urge the Australian government to send the appropriate minister and appropriate shadow minister to lead an Australian delegation to the Asia-Pacific Regional Microcredit Summit in Bali in 2008. Again I thank all the other members who will be speaking on such an important motion today.

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