from News Post India
Latin American banks and financial experts have converged here to explore ways to reach out to the poor through micro credit and other initiatives, EFE new agency reported Sunday.
The annual meeting of the Inter-American Development Bank (IDB) April 4-8 will discuss ways to eradicate poverty in Latin America and in the Caribbean, the report said.
The American banks are transforming their traditional ways of doing business and looking to provide the poorest members of the society access to financial system through micro credit and other innovative initiatives, it said.
The banks have already launched a series of schemes such as creating departments of innovation and development, consultation services and low-interest credit facility for the poor to take up self-employment projects.
IDB President Luis Alberto Moreno said at the inaugural Saturday: 'More than 600 institutions provided micro credit to around eight million customers in the region in 2007, with a loan portfolio totalling $8.6 billion'.
He said this was an important achievement, considering that in 2001, the estimated number of micro-finance customers in the region was less than two million and the total credit portfolio barely surpassed $1 billion.
Moreno said the capacity of the region's financial system must be enhanced so that banks can provide even greater financing to micro-businesses.
In Peru, the MiBanco bank, which seeks to promote economic development by providing credit to low-income micro-entrepreneurs, employs a system wherein the customers sell their products and gets paid from the bank.
With this system, the bank has advanced loans to 125,000 customers in 10 months. 'It's a low-cost method,' Rafael Llosa, the bank's general manager, said.
According to a study conducted by the Economist Intelligence Unit of the IDB and the Andean Development Corp (CAF), Peru, Bolivia, Ecuador and El Salvador in Latin America stand out for creating a favourable business climate in microcredit.
Martin Redrado, governor of the Central Bank of Argentina, said various measures have been put in place in his country to finance the small and medium sized firms to promote business.
These include the mechanisms for leasing of equipment, which he described as 'one of the most dynamic financing instruments targeted mainly for the small and medium sized firms in Argentina'.
Fernando Pozo, president of Felaban (Latin American Federation of Banks), said access to the banking services will help reduce poverty.
He said a report drawn up by his organisation showed that among the Latin American countries an average of 70 percent of people do not have access to financial services.
VIDEO: Rome revels in Ranieri's Leicester triumph - Rome, the hometown of Premier League-winning manager Claudio Ranieri, is also claiming Leicester City's unlikely triumph as its own.
2 hours ago