Africa Advocacy Forum II: Microcredit - A Solution for Africa?

This report discusses the main issues that were presented at the Africa Advocacy Forum II, which aimed to put microfinance into a global context.

The participants at the forum:

• Acknowledged the critical role of microfinance in mobilizing resources;
• Highlighted the international importance given to microfinance as a poverty eradication tool;
• Answered, to the question, Is microcredit a solution for Africa? and stressed that it is the only solution.

The participants agreed that:

• Successful microfinance operations relied upon the existence of an enabling environment that consisted of efficient and adequate infrastructure, health related schemes, insurance policies, an appropriate regulatory framework, sound macro-economic environment, financial stability and the involvement of civil society;
• The informal economy, which represents more than half of the African economies, should be the focus of the development process in the region;
• Microfinance had not yet reached the youth, women, the poorest of the poor and the rural population.

The forum recommended:

• That microfinance capitalize on the existing African knowledge and practices while learning from other countries' experiences;
• The creation of a united front of African MFIs, researchers, trainers and financial supporters to network at international fora to support African practitioners;
• Regular impact assessment to assess the progress made in reaching the goals of microfinance.