ADDRESS BY HON. DR. KWABENA DUFFUOR, MINISTER OF FINANCE AND ECONOMIC PLANNING AT THE NAUGURATION OF THE BOARDS OF DIRECTORS OF THE MICROFINANCE AND SMALL LOANS CENTRE ON WEDNESDAY, 12TH AUGUST, 2009 AT 10:00 A.M.

Mr. Chairman Members of the Board
Ministry of Finance and Economic Planning Officials Representatives from the Media
Distinguished Guests
Ladies and Gentlemen

I wish to welcome all of you on behalf of His Excellency, the President and on my behalf to this important function. Today, we are inaugurating the Board of Directors of the Microfinance and Small Loans Centre, otherwise known as MASLOC. This inauguration is very unique in the sense that this Board is the first for the institution since it was established in September 2006 to provide micro and small loans to the productive poor of the population.

Your selection as Members of the Board serves as an acknowledgment of His Excellency's confidence in you. He has no doubt that the knowledge and understanding of the sector and the vast experience you have acquired over the years will bring to bear on the discourse of the institution as it strives to contribute to poverty alleviation in the country.

Mr. Chairman, it is estimated that, currently there are over 3.6 million of our people living in poverty. These brothers and sisters are suffering from material deprivation, low achievement in education and health, and inadequate access to basic services. They are also vulnerable and exposed to all forms of risks. The situation of this group of people is an outcome of economic, social and political processes that interact with and reinforce each other in ways that exacerbate the state of deprivation in which they live. To alleviate this poverty therefore, one has to understand the complex processes that contributed to their poverty so that appropriate responses can be developed to deal with it. One such response is poor people's access to microfinance and small loans.

Since access to finance is considered a critical component of poverty reduction efforts, it is imperative that alternative, easily accessible and sustainable sources of financing be developed to provide the much needed credit to this large segment of the population. This underscores the Government's decision to intervene to establish the Microfinance and Small Loans Centre to provide micro credit and small loans to the productive poor. The objective of the Scheme is to support the Government's programme of reducing poverty as outlined in the President's State of Nations Address and the economic policy of the Government.

Mr. Chairman, like any programme of Government, the Microfinance and Small Loans Scheme will be confronted with some challenges. The absence of workable legal framework; capacity to meet the huge demand of loanable funds; perception that Government money is free and its implications for recovery of loans; lack of entrepreneurial skills; problems of collaterals are some of the critical challenges that will confront you as you manage the Scheme.

But Mr. Chairman, to me the choice, design and implementation of the Microfinance and Small Loans Scheme and its impact on the poor depend largely on the technical and moral capacity of your Board as well as its structure of governance. The success of this poverty alleviation scheme also depends on your ability to identify the sources of the poor people's deprivation trap and to respond with tailor-made products and services. The need to secure the buy-in of civil society, private sector, government institutions and the poor themselves is also a critical factor of success which will require your attention.

Your strategy should therefore be able to identify who the poor are, where they live, and which aspects of their poverty needs financial support. The strategy must also establish the medium to long term targets for poverty reduction using access to finance. It must also define the framework for monitoring progress and mechanisms for sharing information with your key stakeholders. Finally, the strategy must describe the participatory process, that is, the format frequency and location of your consultations.

Mr. Chairman and Members of the Board, on behalf of His Excellency, the President of the Republic of Ghana and on my own behalf, I congratulate you for accepting to serve on the Board of the Microfinance and Small Loans Centre.

Thank you and May God/Allah Bless you.