NEW YORK (AFP) – Jordan’s Queen Rania, who launched a new microcredit campaign Wednesday, said offering banking services to the world’s poor yields wider social benefits, but that more cash is needed to combat poverty.
In an interview with AFP, the Jordanian queen said demand for microcredit from the destitute in Jordan and the wider Middle East is outpacing funds, as she argued that microcredit could help empower women across the Middle East.
“Unfortunately in the region, the demand is outstripping the supply, the financial capital to meet this demand, so it’s one of the most under-serviced regions,” the queen said.
Speaking passionately, the striking Jordanian royal said the Middle East was enduring a “finance gap,” and she called on governments and donor agencies to dig deep and help support microcredit programs that offer tiny loans to poor, but budding entrepreneurs.
“I believe it is one of the tools to empower women. In order to improve women’s status in the Arab world, it’s a multi-faceted approach, you have to target the issue from many different angles, but one of the ways is through microfinance,” she said.
The queen, who is married to King Abdullah II, spoke after unveiling the launch of a major new microcredit program to be run by FINCA International (Foundation for International Community Assistance), a global microcredit pioneer.
Microcredit, or microfinance, works by extending small loans to the poor without collateral so that budding entrepreneurs can expand a small business, such as a handicraft shop or food stall. Loans are typically paid back with interest.
Such poverty-busting programs exist across the Americas, Asia and Africa and are gaining ground in the Middle East, including Saudi Arabia. The sector has boomed to include savings and microinsurance and has won United Nations support.
The queen sits on FINCA’s board, and the new program seeks to expand FINCA’s global footprint by offering financial services to one million of the world’s poorest families, including a new initiative targetting Jordan.
Queen Rania hopes the Jordan programs can be used as a spring board to spread the appeal of microcredit across the wider Middle East.
She said the Jordan program would not turn away needy Iraqi refugees, who have flooded into Jordan since the United States invaded Iraq in 2003, and that Jordanian women would be especially encouraged to participate.
“A lot of the Iraqis that we have in Jordan are not necessarily considered refugees, a lot of them are quite well off, but obviously some are not and some will need services and they won’t be excluded,” the queen said.
Talking in a meeting room at New York University, Queen Rania said FINCA’s objective in Jordan would be to serve all people, “regardless of their origins.”
She stressed that other FINCA programs around the world have enabled women to take control of family finances and that women often plough any business gains, however small, into their children’s education and healthcare triggering a broader social payback.
“I believe it is one of the tools to empower women. In order to improve women’s status in the Arab world, it’s a multi-faceted approach, you have to target the issue from many different angles, but one of the ways is through microfinance,” the queen said.
Despite speaking ambitiously of microcredit’s potential, the queen said she recognizes it is not a sole panacea to eradicate global poverty.
“It’s an enabling tool. It takes an individual himself to want to use that tool. A person has to have an entrepreneurial will and determination to succeed,” she underlined.
“If you have the determination and the desire to establish your own business, to take control of your life, then it can work,” she said, arguing it’s one of the most “powerful” methods that can be used to combat crushing poverty.
The challenge facing the queen, FINCA and the microcredit sector is enormous. Experts estimate there are between 1.0 and 1.2 billion people around the world who scratch out a living on less than one dollar a day.
But microcredit at root is ingenious, the queen says.
“It’s a very simple idea of giving people a small loan … people who haven’t had access to financial services previously,” she said, stressing that it offers the socially excluded “dignity.”
The financial sector has started taking note, however, and insurance giant AIG announced a pledge Wednesday of 1.5 million dollars to boost FINCA’s operations.