Queen Rania's speech at International Finance Corporation Forum 2005 - Washington DC, USA

Washington, DC

June 01, 2005

Thank you, [Mr. Jabre Assaad], for your very kind introduction – and, more important, for all you do as Vice President of the International Finance Corporation to support microfinance. 

And let me offer my appreciation – not only to IFC for hosting this gathering, but to all our participants and partners:  the UN Capital Development Fund… CGAP – The Consultative Group to Assist the Poor… and FINCA, the Foundation for International Community Assistance… all of whom have done so much to focus our attention on microfinance in the Middle East.

I know I don’t need to tell this audience what microfinance is.  The reason I’m standing with you today is that I’ve seen what microfinance does. 

Over the last 5 years, we have been working to promote microfinance in Jordan.  I am proud to say that today we have a number of world class microfinance institutions enabling thousands of people to build better lives for themselves. 

People like Nada -- a 52-year old widow, and client of the Microfund for Women.  Nada began with a loan of 150 dinars – a little more than 200 dollars.  Today, she’s the owner of not one but two thriving businesses to support her family.  With nine consecutive loans behind her, her earnings speak for themselves:  a steady income, a savings account, and a priceless new sense of self-worth.  She helped her son start a barbershop.  She’s a role model for her granddaughter.  And she proudly says she’s more determined to work hard than ever before. 

There are many women like Nada in Jordan – each proving every day that 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.  Not merely because it is smart and right, but because it is indispensable.  If my region is to build the hopeful future our citizens want and deserve, we need to create almost 50 million jobs in the next five years.  That’s a macro-challenge.  But microfinance can be a tremendous asset – empowering people to create fulfilling employment for themselves. 

Today, microfinance institutions reach some 900,000 clients in the Arab world.  Seventy percent of these clients are women.  And region-wide, the sector is believed to be growing as much as 50 percent a year.

Yet, for every nation like Jordan, Egypt or Morocco where microfinance is starting to flourish, there are others where the soil is parched and the seeds have only recently been sown. 

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.  They 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.  They simply cannot gain a foothold on the path that leads to prosperity. 

Today, I hope, your panels will formulate strategies for bringing microcredit to such people.

But to build a bright future for the Arab world, microcredit on its own won’t be enough.  We need to establish inclusive financial systems that offer a full range of services -- from savings accounts… to insurance… pensions… remittances… cash transfers… and more – the tools that enable resiliency… income generation… and growth.

And though the skeptics may say it can’t be done, I believe the poor are bankable.  Indeed, the poor are banking on us to throw the doors open wide, enabling access to financial services that all of us here take for granted.  Microbusinesses frequently earn a rate of return  in relative terms that surpasses that of the top Fortune 500 companies.   Since the capital requirements of microbusinesses are small in absolute terms, the key is enabling financial institutions to reach enough poor clients to take advantage of economies of scale.
As many of you know, over the last five years, IFC has been a visionary leader in this area – helping, as Peter Woicke [pronunciation: Voykay] once said, “to push the frontier of microfinance toward the commercial mainstream, where it belongs.” 

And around the world, we’re seeing examples of innovation in action – from microfinance institutions transforming into banks themselves… to new banks being created especially to serve poor clients… to commercial banks launching retail microfinance operations. 

Now, we need to accelerate this trend throughout the Arab world.  We need a new breed of financial service providers to bridge the gap between non-profit and for-profit institutions – guided by leaders who see true value in 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.  And soon, instead of a few brave soloists, singing against the wind… we’ll have a vibrant ensemble of providers to bring the banking sector to the poor. 

Much of our ability to realize this vision depends on developing talent.  So I’m very pleased that CGAP – working in partnership with the G8 – has established a regional technical hub and training program in Jordan to help young Arab leaders hone their managerial skills. 

Realizing the vision also demands that we translate words into action. 
Resources are needed for start-up institutions. Many promising microcrofinance NGOs need technical assistance to become “investment ready.”

Otherwise,  existing microfinance organizations cannot absorb the debt and equity financing that is available.

Thus, we welcome IFC’s Pep-mena project and hope that it can support such efforts.

Realizing the vision also requires more regional collaboration.  Ten days ago, I chaired the first session of the G8-MENA executive council at the World Economic Forum in Jordan.  We committed to a set of best practice principles for microfinance and agreed that governments should foster an enabling policy environment.  With support from the microfinance community and CGAP, Jordan has developed a national strategy for microfinance – a five-year outreach and promotion plan we hope will serve as a regional model.  Meanwhile, FINCA is working with  CGAP, IFC and others to start offering sharia –compliant loans in a number of countries in the Middle East and Afghanistan.

So we’re making progress.  But we cannot rest.  We must speed -- not slacken -- our pace.  For as Robert Kennedy said so well, “The future is not a gift:  It’s an achievement.”

And in that spirit, let me set forth a challenge to all of us today – an achievement we can work together to realize in the next five years:  Let us commit to expand the reach of microfinance to three million clients in the Arab world.

The needs are great.  The partners are there.  And the time to act is now.  In this International Year of Microcredit, let us change people’s lives forever.

I imagine many of you here have seen the Year of Microcredit logo, with its dynamic swirl of power and progress, radiating from one strong core. 

You are part of that core.  With your dedication… leadership… and talent… a better future for the MENA region will be within our reach.  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.

Thank you very much.