Banking on Development

Triodos Bank has been recognised as one of the West country’s most sus-tainable businesses. Last year, the ethical bank also won the Queen’s Award for Sustainable Development and was named by Bristol University as the socially responsible organisation of the year’. Now, the big-hearted bank is supporting a United Nations initiative which has designated 2005 as the International Year of Microcredit.

A disturbing consequence of globalisation is the increasing wealth of a few individuals at the expense of billions of people living in increasing poverty. Most foreign multinationals investing in the developing world are primarily interested in low labour costs, rather than building strong, local economies to benefit local people. The theory that foreign investment by multinational companies is good’ for development because the benefits of economic growth eventually trickle down’ to the poor, remains unproven. Without the development of robust economies, the future for many people seems bleak.

Microfinance institutions operate across the majority world, providing poorer people with access to the basic financial services that most of us take for granted, like loans, savings and insurance. Often, these services are only available to the wealthiest in develop-ing countries. The amounts involved are quite small in Western terms, often around £50, but when invested in tools, materials or a market place shop, it can go a long way. By supporting new enter-prises and creating jobs, microfinance can help local economies to thrive. UN studies have shown that it has led to improvements in everything from public health and education to the status of women in the community.

Triodos Bank has 38 million Euros invested in 40 microfinance banks in developing countries. The money has already made a real difference to over 27 million people and by raising the profile of microfinance, millions more could benefit. This year, the UN hopes that innovative partnerships might be formed between governments, NGOs, the private sector and the microfinance clients that need their support.

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