DECLARATIONS
An alternative Summit on Microfinance focusing on inclusive development has been organized by National Rural Livelihoods Mission, Ministry of Rural Development, Government of India, SERP, Government of Andhra Pradesh, and International Network of Alternative Microfinance Institutions (INAFI India) from 21-23, 2011. The international conference was attended by delegates from India, Bangladesh, Sri Lanka, Nepal, Afghanistan, Philippines, and China.
With primacy on social capital, development outcome and savings-led microfinance services, the summit had deliberated upon the multi-dimensional aspects of development covering livelihoods, health, MDGs, social security, gender empowerment and mainstreaming across the development spectrum. A host of operational and policy issues have emerged from the deliberations, so also policy leads in many of the topical issues. Synthesizing these issues and policy leads/recommendations, the summit resolved to commend the following declarations to the world of microfinance including the practitioners, Government, regulators and policy makers.1. The purpose of microfinance being poverty reduction, development outcome connecting with Millennium Development Goals, securing social security and entitlements should be guiding the provision of microfinance services.
2. The institutions delivering micro-credit shall be recognized as MCIs i.e. Micro Credit Institutions and not as MFIs as it gives rise to misleading expectations and under advantages. The summit recognizes the need to develop appropriate nomenclature for microfinance with inclusive development.
3. The social capital model of microfinance shall focus on building institutions founded on mutuality and solidarity, specifically federations of SHG, and specialized institutions on health, education, livelihood for technical support to SHGs.
4. Microfinance shall go beyond credit and shall include ‘Savings-first’ approach with differentiated savings products for livelihood, health, education and life cycle needs; insurance and micro pension for social for social security, remittance services for migrants, micro justice for conflict resolution.
5. Holistic development approach with social and financial intermediation, livelihoods/enterprise promotion, integration with mainstream for civic intermediation with proper sequencing, graduation, context and member specific interventions shall guide the microfinance programmes.
6. Microfinance interventions shall be integrated into sub-sector economic development process such as agriculture, farming, dairy, fisheries, etc.
7. Capacity building of the enabling and demand stream is a crucial component of microfinance interventions and needs continuous public investment.
8. Self-regulation process shall be a part of the microfinance programmes, which would promote growth with equality. The SHG Federations shall draw a road map and set standards for governance, financial and social development aspects according to their age and contexts and evolve action plans for implementation.
9. In building livelihoods systems, community ownership in the form of producer and marketing companies with professional management shall be promoted with innovative and appropriate credit products. Creation of value and supply chain needs public investments for establishing infrastructure like cold chain, transport and processing.
10. Gender empowerment and mainstreaming shall remain the core of the microfinance programmes.
11. Highly vulnerable groups including Destitute, aged, physically and mentally challenged shall be organized with the help of microfinance exclusively with higher degree of sensitivity and innovation.
12. Mainstreaming microfinance through linkages with the banking system shall promote financial inclusion to provide access with affordability for the poor. The banking system shall respond to the microfinance clients with timely credit and appropriate financial products.
