Why I backed the CityAM charity appeal
IF WE’RE serious about tackling global poverty, then aid alone isn’t going to do it. It is the power of private enterprise that can tip the scales. 90 per cent of the jobs created around the world are provided not by governments but by the private sector.
Currently, more than 2.5bn people have no bank accounts or insurance. Small businesses account for over 45 per cent of all employment in developing countries and their growth is vital to creating jobs and increasing prosperity. Yet they constantly struggle to raise finance.
For too long, not enough has been done to tap the potential of the private sector to bring transformational development. This government is clear that has to change. We’re doing everything we can to encourage more investment into the poorest countries.
The UK is reducing barriers, costs and risks of doing business, cutting red tape and expanding markets and trade.
We’re increasing private investment into the poorest countries, with CDC – the government’s reformed and reinvigorated overseas investment corporation – investing in countries currently starved of capital.
And the UK is supporting programmes to provide 50m people with financial services, and investing in infrastructure like telecoms, energy and transport in the developing world.
The potential of the private sector, and the need to tap into this potential, is something that Opportunity International also clearly understands. Poor people in developing countries are working to pull themselves out of poverty. But they are often ignored as not sufficiently profitable or dismissed as too high a risk for financial services. Not by Opportunity International. And it turns out it’s not such a risky investment after all, with the charity’s clients maintaining an average repayment rate of 96 per cent or better on loans.
That’s not the only way in which the charity is delivering results. Take women: they account for 60 per cent of the world’s working poor but own less than 1 per cent of the means of production and receive less than 10 per cent of the world’s income.
Opportunity International knows that investing in women can be transformational. That’s why they make up 84 per cent of the people it serves. In turn, these women are more likely to invest the proceeds of their business in the health, education and welfare of their families and wider communities.
The life-changing potential of this sort of smart investment is something that readers of CityAM get as well. Just 15 days into this year’s Christmas appeal, and already a staggering £200,000 has been donated.
It’s in recognition of this generosity that the UK government will be match-funding pound for pound all public donations to CityAM’s appeal, which is looking to provide financial services to people in one of the poorest and least banked regions of Malawi.
We will help Opportunity International double the impact of its work to create jobs and income and provide twice as many people with life-altering financial services, giving thousands more people the chance to take charge of their own destinies. Surely that’s too good an opportunity to miss?
Andrew Mitchell is the secretary of state for international development. www.cityam.com/appeal