The Impact of the UN International Year of Microcredit and the Role of ING and Other Commercial Banks

This is the speech of Alexander Rinnooy Kan of ING Microfinance support group at a seminar on the role of commercial banks in microfinance.

The speech includes the role that ING has been performing in creating awareness and making a direct contribution to microfinance. ING has:

• Set up a special microfinance program for employees in the Netherlands;
• Sent advisors to Montenegro, Serbia, Russia, India, the Philippines, Mexico, Nicaragua, Sierra Leone and Ghana;
• Started a special relationship with Oikocredit, one of the largest institutions for private capital financing in microfinance;
• Been offering microfinance funds through Postbank Green and ING Vysya Bank;
• Been one of the three main sponsors of the "International Year of Microcredit."

Mr. Kan raised the question: "How to grow microfinance, how to increase the outreach of financial services?" He summarized the advice as under:

• Governments: facilitate through regulation, but do not subsidize;
• NGOs: do not fear change;
• Commercial financial sector: increase the outreach of microfinance by fully developing it as a business activity.

The important message conveyed in the speech is as under:

• Only the private sector will have the ability to provide the organization, expertise and capital that can drive a rapid increase in access to financial services;
• The goal for every NGO must be to eventually become redundant.;
• With microfinance, banks can do both - make money and help people at the same time.

Finally, the message concludes that for ING:

• There is a possibility to combine good, profitable business with corporate responsibility on a vast scale;
• Providing people access to financial services is becoming commercially viable;
• Growth is inevitable, because of corporate responsibility or profit, or by a combination in a so called "dual strategy."