Microfinance grows despite crisis

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Although the world is in the throes of an economic crisis, the global market for microfinance is expected to grow by 4 percent this year to reach a total of 61 billion euros. Dutch companies play an important part in the sector, accounting for a share of over 8 percent.

These details emerge from the report ‘A Billion to Gain’ from the ING Bank’s Dutch Economic Desk, which was presented to Princess Máxima in Amsterdam on Tuesday. The princess has been an ambassador for microfinance for a number of years.

Growth in the sector has slowed considerably in recent years. Last year, the international microfinance market grew by 5 percent, compared to growth of 50 percent in 2007. In addition to the financial crisis, it has suffered from negative publicity about excessive interest rates and a wave of suicides in India linked to heavy debts associated with microfinance.

In these times of crisis and shrinking public budgets ING’s chief economist Mark Cliffe said this is the time to be smarter in deploying limited resources. The report says there are still 2.7 billion people across the world with no access to financial services.

The report also reveals that Dutch microfinance investors have a strong tendency to invest in relatively strong developing countries, for example in South America, but are far less likely to invest in poorer African countries. Microfinance now reaches around 190 million people worldwide.

© Radio Netherlands Worldwide

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