Underlying context
PRIVATE INITIATIVE AS A TOOL OF DEVELOPMENT
HUGE NEEDS
and a HUGE NUMBER OF SMALL NEEDS
About 100 million people benefit from this type of lending. Experience shows that a well-managed MFI, operating in a sufficiently stable environment, can be profitable enough to attract private capital and achieve durable growth.
International experts forecast up to ten-fold growth in micro-credit needs in the next 10 years. 2005, designated "International Year of Microcredit" by the General Assembly of the United Nations, gave a new momentum.
SMEs
Microfinance reaches entrepreneurs of small companies operating in the informal economy. On the next rung of the economic ladder, developing country SMEs, larger and more structured firms that are part of the formal economy, also constitute a sector with enormous needs. A lack of available capital for long term investment and a deficient management culture are brakes on the development of this sector, which is widely considered to be the weakest link in the economic fabric of developing countries, particularly in Africa.
Developing countries have substantial needs in every area. Governments and international co-operation play a primary role in meeting many of these needs; but private initiative can also play a growing part. However, for this to happen, entrepreneurs must have access to the resources that are indispensable for even the most modest business.
I&P's objective is to accompany, financially and humanly, those who take on the challenge of providing for themselves by a business activity.
I&P's objective is to accompany, financially and humanly, those who take on the challenge of providing for themselves by a business activity.
HUGE NEEDS
and a HUGE NUMBER OF SMALL NEEDS
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Microfinance
The last years have seen the creation and development of many microfinance institutions. An MFI is a locally-established micro bank able to provide and manage loans, often on a very small scale, to people excluded from the classic banking system.
These loans allow individual entrepreneurs to start or develop businesses that are profitable enough to provide livelihoods for themselves and their families, and sometimes work for a few employee. |
International experts forecast up to ten-fold growth in micro-credit needs in the next 10 years. 2005, designated "International Year of Microcredit" by the General Assembly of the United Nations, gave a new momentum.
SMEs
Microfinance reaches entrepreneurs of small companies operating in the informal economy. On the next rung of the economic ladder, developing country SMEs, larger and more structured firms that are part of the formal economy, also constitute a sector with enormous needs. A lack of available capital for long term investment and a deficient management culture are brakes on the development of this sector, which is widely considered to be the weakest link in the economic fabric of developing countries, particularly in Africa.