E mail Interview of Robyn Cornford The Foundation for Development Cooperation Australia www.fdc.org.au At FDC, Ms Cornford works primarily in the field of microfinance. Since joining the Foundation, she has project managed two important studies: a longitudinal impact study on the operations of a Philippines microfinance project and a study for the Asian Development Bank, The Role of Central Banks in Microfinance. As part of the ADB project, she designed and conducted a comprehensive information survey seeking the views of over 50 microfinance practitioners in the Asia-Pacific region resulting in the paper: ADB INTERIM ACTION PLAN FOR MICROFINANCE: Attitudes and Responses of Microfinance Practitioners. 5th February 2001 B and Y - have you some information concerning the microfinance schemes developed in Australia for Aborigenal people ? The Aboriginal and Torres Strait Islander Commission (ATSIC) have various programs where they provide either grants or low-interest loans to Aboriginal people and organisations wanting to set up their own businesses. Most of these inititives come under the heading of what is called the Business Development Loan Program (BDP). If you were to ring the ATSIC head office in whichever state you are in and ask to speak to whoever is in charge of the program, you may be able to get some much more detailed information. It is hard to call these programs 'microfinance' as loan sizes range between relatively small amounts (for Australia) i.e. around A$10,000 -12,000 up to hundreds of thousands of dollars. These programs are also not financially sustainable in the sense that they are not being operated with the objective of reaching either operational or financial self-sufficiency. Their policy objective is to provide additional assistance to Aboriginal and Torres Strait Islander people who might feel uncomfortable accessing more mainstream funding. The ATSIC website is: www.atsic.gov.au If you look under Programs, you will probably find information on their various funding avenues. Abstracts of CAEPR papers can be found on their website at www.online.anu.edu/caepr There is also a very interesting credit union in Arnhem Land in the Northern Territory called the Traditional Credit Union. They provide basic banking services - deposits, withdrawals, loans and savings. Their loans are more for household goods however, not for enterprise. They are particularly interesting as they operate in very remote communities. They are very much part of the communities is which they are based (they have local aboriginal staff speaking local languages, etc.) and they have introduced technology (computers and debit cards and, by now, ATMs) which did not previously exist and with which their members are increasingly comfortable. B and Y : Do you know any informal financial assistance in Sydney ? The ANA Foresters Friendly Society may also be a useful contact. They are based here in Brisbane but it might be useful for you to speak to them about possible contacts in Sydney. ANA Forresters works on a cooperative basis and I know that they have helped establish very small, very informal, revolving savings and loan funds within community and neighbourhood groups. Here in Queensland, just outside of Brisbane, we also have the Maleny and District Community Credit Union Limited which has several micro-lending products for its members. I have also heard that members of various ethnic communities are often involved in informal but fairly substantial rotating savings and credit associations (ROSCAs). I have heard of various members of the Chinese community here in Brisbane being a part of such associations. I would be very surprised if the same informal savings and loans groups were not present within the Chinese community in Sydney. B and Y : More generally do you think that the microfinance recognition at an international level is a good or a bad thing? Isn t there a risk for local initiatives to be taken over by international institutions and forget to meet the needs of the local population ? I will answer both of these questions on the basis that my answers represent my personal opinion. In answer to your first question...I believe it is a good thing. Basically, because I do think that microfinance is a sustainable way of potentially reaching very large numbers of poor people in a way in which they, themselves are contributing to their development. And my own personal view is that giving people a chance to improve their situation themselves is a much better option than the more traditional donor-donee relationship of charitable giving. The more international recognition it receives, the more funding sources become available and also, hopefully, the more banks and other traditional financial institutions will begin to look at ways in which they can increase the depth of their services to provide financial services to people they would not normally have considered as viable customers. However, gaining international recognition is not a good thing if that recognition is not well-informed. Unfortunately, I see many examples of the very poor use and application of donor and government funds in very badly designed programs which do not meet the needs of the people at the community level. When it comes to microfinance, I am very much in favour of demand-led development and I think the significant publicity that successful microfinance programs generate unfortunately leads many people to perceive microfinance as some kind of 'panacea' for all development issues rather than a tool that MIGHT be useful if careful analysis of the circumstances and setting support its use. Like all other development tools, I believe the applicability of microfinance should be considered from an holistic viewpoint. My other major concern is that it is microcredit that is often emphasised with much less consideration given to other valuable services (safe savings facilities, forms of insurance, etc.) How to provide these services safely and sustainably is, of course, one of the major issues in microfinance today. Finally, yes, there is a very real risk for local initiatives to be taken over by international initiatives and part of that risk stems from my point above, ie. when international donors and organisations do not take the time and trouble to inform themselves of the local environment. I, personally, believe that project-based microfinance is not good development. A lot of donors, however, behave a little like international investors (particularly in relation to microfinance) wanting 'quick' returns and an exit strategy for their specific project/investment rather than taking a longer term view. In many cases, seeking a quick return does not allow for a real transfer of skills or consideration of a particular community's aspirations and needs and the long-term, truly sustainable development of a community.