Microcredit key to development, says Spain's Queen Sofia

By Penny Hawthorne | 26 April 2005

Sub-saharan African is undercapitalized. People with ideas of how to improve their communities cannot get the finance to set up new businesses. The lack of capital means that African productivity remains low, and yet productivity increases are the cause of wage rises. Microcredit helps to rectify this. It is good to see that microcredit has been warmly endorsed, once again, by Span's Queen Sofia (writes BusinessWeek):

Awarding credit to potential small business owners who would not qualify through traditional banking avenues is an efficient tool for combating extreme poverty in Latin America and the entire world, Spain's Queen Sofia said during a microcredit conference here [Mexico] Monday.

In a little more than two decades, microcredits "have changed from being an activity perceived as marginal... to a key element for development," said the queen, who has promoted the issue in other countries as well.