Microfinance to spur economic development

by Lalin FERNANDOPULLE

The Asian Microfinance Forum (AMF) will inspire and help turn a new page in the history of Asia, said Chairman, Banking with the Poor Network (BWTP), Chandula Abeywickrema addressing the AMF 2010 in Colombo on Wednesday.

He said microfinance has changed the outlook of Asia and has helped the region to emerge from poverty and achieve economic growth.

"Microfinance will empower and enrich the lives of people in Asia which has withstood many challenges and are forging ahead to reach milestones in economic development", Abeywickrema said.

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The theme of the AMF 2010 was 'Financial Inclusion-Achieving Asia's Potential'. AMF is the apex meeting of the stakeholders of the region's microfinance industry.

Abeywickrema said that with four decades of diverse initiatives the microfinance industry in Asia has evolved to a level which is focused on providing inclusive financial services to more people.

The forum focused on moving beyond microcredit to developments in savings, remittances, insurance and the role of technology to facilitate the sectors.

"The AMF held in Sri Lanka is timely and appropriate as Asia is emerging from the global financial turmoil to move towards sustainable development", he said.

AMF is vital for Sri Lanka as microfinance provides an important post-conflict recovery tool for the North and the East of the country.

Access to credit has been a recurring problem to regional entrepreneurs who are skilled but lack resources to develop an industry. Banks have been reluctant to provide credit to entrepreneurs due to the absence of collateral.

Sri Lanka has over 10,000 microfinance providers and the sector has potential to expand and contribute to economic revival of poorer communities in the country.

The inaugural AMF was held in China in 2006 and then in Vietnam in 2008. The fora created a major impact in the growth of the economies in Asia.

CEO, Citi Asia Pacific, Shirish Apte said microfinance in Sri Lanka has evolved and it makes a salient contribution to regional development.

"The landscape of microfinance has changed significantly and there is a need to discuss issues pertaining to the sector and its growth", Apte said.

The Foundation for Development Cooperation (FDC) and BWTP are partners of AMF. FDC was set up in Australia in 1990 and conducts policy-oriented research, fosters awareness, mobilises Australian and overseas development cooperation and supports non governmental development efforts.

BWTP is the largest Asia based regional network with over 20 years in operation contributing to the growth of the microfinance industry in Asia.

The microfinance movement in Sri Lanka commenced in 1906 with the setting up of the Thrift and Credit Co-operative Societies under the Co-operative Society Ordinance introduced by the British.

Co-operative Societies fulfilled a wider role during the early part of the 20th century.The role of societies were taken over by Multi Purpose Co-operative Societies which were set up in 1940s.

AMF is held biannually and it brings together a wide collection of industry stakeholders.