The ILO helps advance the creation of decent jobs. Whether women and men have decent work also depends on the access of households, workers and enterprises to financial services. Decent work embraces various aspects of the daily life of the working poor – productive employment, safe working conditions, absence of child labour, abolition of bonded labour, formalization of informal enterprises, access to social protection and the right to organize. Decent work is far from being a reality for millions of working poor: still, 1.5 billion people live on less than US $ 2 a day.
ILO Online: What is the impact of the current crisis on microfinance?
Bernd Balkenhol: It depends largely on the way microfinance institutions raise their resources. Cooperatively organized microfinance institutions (MFIs) use primarily member deposits, while NGOs work mostly with grants and soft loans. Microfinance banks for their part are refinanced on market conditions or at concessional rates and if they are authorized to do so, they also collect member deposits. These different types of financial resources transmit the crisis effects differently. A MFI that depends on outside credit lines in hard currency is likely to face cost increased and harsher collateral requirements. By contrast, MFIs that work primarily with locally mobilized resources, and especially retail deposits are fairly isolated from the contagion. In short: the more a MFI is integrated itself into the commercial financial market, the more it is now exposed to the fall-out from the crisis.
See full Press release.
Posts
