Ladies
and Gentlemen,
Firstly
I would like to congratulate NAM CSSTC and the Ministry of Foreign Affairs
of the Republic of Indonesia for conducting this expert meeting to
formulate a basic guideline on microfinance in cooperation with the
Islamic Development Bank.
We are
all aware that microfinance policy is becoming more important for it is a
strategic part of poverty eradicating process. We have witnessed recently
that there have been series of supporting activities within the framework
of poverty eradication through microfinance, such as:
-
Asia
Pacific Region Microcredit Summit Meeting held in Dhaka, Bangladesh,
on16-19 February 2004, which reaffirmed that microfinance must reach
the poorest, and encouraged international community to build
self-sufficient microfinance institution.
-
High Level Policy Meeting on Microfinance and Rural Finance in Asia
conducted in Yogyakarta, on 26-28 February 2004, to anticipate the UN
Year of Micro Finance 2005 in building millions of Micro Finance
Institutions; and the UN Millenium Development Goals for the Reduction
of People living in Poverty by half in 2015. The meeting emphasized
on: (1) creating condusive environment for microfinance and rural
finance: (2) regulating and supervising microfinance; (3) how to
organize capacity and institutional building for microfinance and
ruralfinance; and (4) defining the role of central banks and
governemnt in creating condusive environment for microfinance.
In
the context of Indonesia development, there is a new paradigm on poverty
reduction, which focused on:
-
Poverty
reduction through microfinance development
-
Human
development – small and medium entreprises development –
microfinance development
-
Role
of government as facilitator
The
Poverty Reduction Strategy itself comprises of:
-
People’s
empowerment
-
Reduction
expenditure burden of poor households
-
Formulating
productivity through audits and financial management
The
implementation of such strategy includes:
-
Mainstreaming
government budget. Focusing on employment of small and medium
entreprises and financial management
-
Prioritizing
bank’s credit for micro, small and medium entreprises of productive
poor
-
Providing
facilitator/extension services on community development, technical
production and other support facilities
The
key elements should include:
-
Empowerment
of small and medium entreprises and microfinance institutions
-
Monitoring
and evaluation
-
Legal
status of microfinance institutions
Based
on the practical experiences, we suggest that this expert meeting discuss
the following issues:
-
Understanding
the concept of poverty
-
Types
of financial services
-
The
need of facilitator
-
Monitoring
and evaluation using information technology
-
Legal
framework for microfinance
Finally,
let me conclude my speech by underlining our full support to this expert
meeting since the basic guideline on microfinance is urgently needed by
developing countries, particularly in coping with poverty.
I wish
you a successful meeting, and have a pleasant stay in Jakarta.
Thank
you.
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