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Wednesday, June 1, 2005

International Finance Corporation

Queen Rania calls on microfinance leaders to accelerate the pace of establishing viable microfinance services in the Arab world

(Office of Her Majesty, Press Department - Washington DC) Her Majesty Queen Rania Al-Abdullah, on Tuesday, called on microfinance leaders to accelerate the pace of establishing viable microfinance services and institutions in the Arab world.

"The needs are great. The partners are there. And the time to act is now. Let us change people's lives forever," said Queen Rania.

Addressing an audience of about 300 guests of high-caliber microfinance stakeholders, including incoming World Bank President, Paul Wolfowitz, Queen Rania urged the attendees to commit to the challenge of expanding the reach of microfinance to three million clients in the Arab region.

"With your dedication… leadership… and talent… a better future for the MENA region will be within our reach," Queen Rania said.

"Because all of you know the truth behind the magic of microfinance:

When we offer poor people respect… responsibility… and a fighting chance… they will do far more for themselves than we can ever do for them," she added.

Speaking during a forum entitled "Unlocking the Potential of Microfinance in the Middle East and North Africa" and held at the International Finance Corporation, in Washington DC, Queen Rania, an Emissary for the 2005 UN Year of Microcredit, noted that, although the microfinance sector is "believed to be growing as much as 50% a year", there are other nations in the region that require grave attention.

"One out of five people in the Arab world are born into poverty … and too many people still work from dawn to dusk in the informal sector," she said. She highlighted that such people "don't have access to savings accounts. They can't build credit histories. They may not see value in paying taxes or being part of the formal economy. And thus, no matter how hard they struggle, they're condemned to run in place… or fall behind."

Queen Rania cited loans and capital as just one aspect in addressing the financial service needs of the poor within the region. "To build a bright future for the Arab world, microcredit on its own won't be enough," she said.

"We need to establish inclusive financial systems that offer a full range of services savings accounts, insurance, pensions, cash transfers, and more - the tools that enable resiliency, income generation and growth."

Queen Rania urged those gathered to help develop a new breed of financial service providers within the Arab world to bridge the gap between non-profit and for-profit institutions by stressing a double-bottom line return "where serving shareholders and serving society are not trade-offs but tandem goals."

These new institutions will reach the so-called "bottom of the pyramid" and meet high standards of business performance" setting the pace and marking the score for larger banks to follow."

Citing Jordan's example in working towards realizing this vision, Queen Rania said that Jordan, with the help of CGAP, the Consultative Council to Assist the Poor and in collaboration with the G8, has established a regional technical hub and training program to help young Arab leaders hone their managerial skills".

She added: "Now, we need to accelerate this trend throughout the Arab world."

Queen Rania was speaking one week after chairing the first meeting of the MENA Executive Council on Microfinance, during which policy makers from the Arab world agreed on a common agenda for microfinance and endorsed a set of principles for advancing best practices for the sector in the region. The meeting was hosted by the World Economic Forum, held at the Dead Sea.

The Queen also highlighted Jordan's efforts in developing a five-year national strategy to expand the outreach of microfinance throughout the country, which will serve as a regional model. She urged panelists to formulate strategies that will alleviate the sufferings of the poor and ensure their integration into their societies as active and functional citizens.

"Microfinance does more than help small businesses grow strong roots. It nourishes capable, resourceful people who are starving for opportunity. It raises their sights. It cultivates their confidence. And it reaps a harvest of hope. And our goal today is to spread that harvest across the Arab world," she said.

The IFC-hosted event was attended by high-level representatives from the UN Capital Development Fund, CGAP, and the Foundation for International Community Assistance (FINCA), where Queen Rania is a member of the Board of Directors, and included a panel discussion moderated by CGAP CEO, Ms. Elizabeth Littlefield.

The mission of IFC is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives.

Founded in 1956, IFC has been investing in the microfinance sector in the Middle East since 1997. In addition to investment, IFC is providing substantial technical assistance through its Private Enterprise Partnership in the Middle East and North Africa, according to an IFC press release. These efforts, the statement said, are helping develop a vibrant sector for the financing of micro and small businesses across the region