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January 2009: Get a letter to the editor published: Microfinance proves aid can reach the very poor

Microfinance is much more than simply an income-generation tool. By directly empowering poor people, particularly women, it has become one of the key driving mechanisms towards meeting the Millennium Development Goals, specifically the overarching target of halving extreme poverty and hunger by 2015.

— Mark Malloch Brown, former Chef de Cabinet, Office of the Secretary-General to the United Nations

On 26 January 2009, the Microcredit Summit Campaign (MCS) launched the 2009 State of the Campaign Report and announced that more than 106 million of the world’s poorest families received a microloan in 2007. This amazing accomplishment comes only 33 years after Dr. Muhammad Yunus, Nobel Peace Prize laureate and founder of the Grameen Bank in Bangladesh, first realized that a very small loan can help even the poorest people lift themselves and their families out of extreme poverty. He started the microfinance movement in 1976 with loans of less that $1 each to 42 borrowers. The rapid growth of microfinance for the poor would not have been possible without revolutionary leaders like Dr. Yunus and others, who rejected traditional banking attitudes towards the very poor, and determined microfinance practitioners who spread these life-changing ideas around the world.

Leaders in Congress have pledged to reform U.S. foreign assistance to increase its effectiveness, and President-elect Obama has promised to double foreign aid. But real transformation of U.S. foreign assistance is not possible unless it is guided by the lessons the Microcredit Summit Campaign (MCS) has taught us: focus on the poorest, set targets to achieve measurable outcomes, and monitor progress to ensure we achieve results.

Media coverage of this momentous accomplishment and the lessons it provides U.S. foreign assistance can help shape the foreign aid reform debate in Congress. Get a letter to the editor published today!

Sample Letter to the Editor

Instructions: Follow the guidelines for letters to the editor provided by your local papers. Always include your address and phone number with your submission. Make your letter short (150–250 words) and to-the-point using the EPIC format (see sample letter below). To write a letter through the RESULTS website, go to http://capwiz.com/results/dbq/media. You can write the bulk of your letter before January 27 and refer to the MCS report launch and any local media coverage. If your letter gets published, amplify its impact by sending a copy of your published letter to your members of Congress.

Engage	Despite the challenges we faced last year, 2009 brings hope for a new start. As we address the economic crisis that has harmed so many American families, we must not forget its impact on those living on the edge — the 980 million people living on less than $1 per day and 1.4 billion living on less than $1.25 a day. Tip: Connect global poverty to a timely news issue, a local story, a personal experience, or hopefully coverage of the announcement in your newspaper.
Problem	Unfortunately, the poorest are too often deemed unreachable in a time of financial crisis, especially when our foreign assistance budget is stretched thin and fails to prioritize the very poor.
Inform about the solution	But microfinance gives hope to the very poor and teaches us that foreign aid can effectively reach those most in need: The Microcredit Summit Campaign, which set a goal in 1997 to reach 100 million of the world’s poorest with microfinance, has hit its mark. Hundreds of millions of lives have been transformed and microfinance practitioners have proven that foreign aid can effectively reach the poorest if it is well designed and implemented.
Call to action!	In 2009, Congress and President Obama will work to overhaul the U.S. foreign assistance program so that it is more effective and efficient. They should integrate the lessons from the Microcredit Summit Campaign and ensure that U.S. foreign aid is focused on the poorest, has clear targets to achieve measurable outcomes, and is monitored to ensure we achieve results.

Lessons for U.S. foreign aid

The Microcredit Summit Campaign is one of the global catalysts of microfinance and has played a critical role in helping the world realize Dr. Yunus’ vision. The Campaign is the only initiative to set bold measurable goals for using microfinance to eradicate poverty and to measure progress toward reaching those goals. This success provides important lessons for U.S. foreign aid reform:

• Focus on the poorest: The Microcredit Summit Campaign demonstrates that the very poor can lift themselves out of poverty, but assistance must be explicitly focused on reaching the very poor. Additionally, a focus on poverty means not only directing aid to the poorest countries, but helping the poorest and most vulnerable people within those countries.
• Set targets to achieve measurable outcomes: Even when aid is well intended, funding will not be used effectively unless clear, measurable outcomes are established. By setting a bold target of reaching 100 million of the poorest families, the Microcredit Summit Campaign and its partners had a clear goal and an unambiguous directive that provides accountability and motivation for both the Campaign and implementers.
• Monitor and publicly report on results: Regular reporting of progress against clear objectives will help keep aid programs on track. Annual tracking of outreach to poor clients provides microfinance institutions with a clear picture of their success and allows each institution to set benchmarks. Without a clear picture of what’s working and what’s not, it is difficult to improve programs and make them more effective.

What is microfinance?

Microfinance provides the very poor with access to financial services, such as small loans, safe savings accounts, and insurance. When properly focused on the needs of the very poor, microfinance is a proven, cost-effective tool to help the very poor, particularly women, lift themselves and their families out of poverty. Microloans, which can start at $50 or less, are used to help people living in extreme poverty start or expand a range of tiny businesses such as husking rice, selling tortillas, and delivering cell phone services to remote villages.

The Microcredit Summit Campaign: setting and achieving goals

The Microcredit Summit Campaign (www.microcreditsummit.org) is a project of RESULTS Educational Fund. The Campaign brings together microcredit practitioners, advocates, educational institutions, donor agencies, international financial institutions, non-governmental organizations, and others involved with microfinance to promote best practices in the field, to stimulate the exchange of knowledge, and to work towards reaching bold measurable goals. The State of the Microcredit Summit Campaign Report is an annual publication that compiles data collected from microfinance institutions worldwide and evaluates progress toward the Campaign’s goals.

The first Microcredit Summit in 1997 launched a campaign to reach 100 million of the world’s poorest families, especially the women of those families, with credit for self employment and other financial and business services by the end of 2005. At the time, less than eight million very poor clients had a microloan.