Princess Máxima: make microcredits cheaper

RNW, 12 May 2011, by Johan van der Tol

(Photo: ANP)

The financial sector should be streamlined to make microcredit loans even more affordable, Princess Máxima of the Netherlands told RNW. She was speaking on a visit to Senegal, where microfinancing has become extremely popular, as it has in other developing countries.

Princess Máxima says she's impressed with the rapid growth of microfinance in Senegal. But, she told RNW that financial institutions now need to “reduce costs in order to reduce the interest rates for the people.”

Extortion

The wife of Dutch crown prince Willem-Alexander has been championing the cause of microcredits for years. Máxima is UN Secretary General Ban Ki-moon's Special Advocate for Inclusive Finance. Small loans enable people in poorer countries to start their own enterprises and earn a living to support their families. Women in particular often rely on these low-threshold loans.

The system is not without its critics, however. There are hundreds of institutions and individuals in Senegal who are involved in microfinancing, many of whom are being accused of exploitation and extortion.

Mobile

Princess Máxima has also drawn attention to the lack of bank accounts for people in developing countries like Senegal. She says cellphones could play an important role in changing this. "At the momen, 80 percent of the Senegalese do not have a bank account. That's why they do everything in cash, which costs a lot of money. We discussed banking via mobile telephones here."

Given the possibilities of microcredits and mobile banking, people in Senegal and other countries will, according to the Dutch princess, gain access to "services which were unimaginable before".

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