Speech to Liberal Democrat Conference 2009 Policy Motion "Development in a Downturn"

6.56.00pm BST (GMT +0100) Sun 27th Sep 2009

"Good afternoon Conference. I welcome and support this motion - in so far as it goes.

Its primary focus is on giving aid to developing countries, and the improvements to the mechanisms and structures by which we can deliver it. Commendably, it has a green thread running through it.

But there is one important omission, and that is microbanking.

Last year I went to Malawi on an insight tour with a microfinance charity called Opportunity International. Opportunity International is the largest microfinance charity in the UK - both Annette Brooke and Jenny Tonge are supporters.

We were shown all aspects of the operation in Malawi, from the bank's vaults to the elderly man who makes utensils out of tin and other metals that he has scavenged. I have one of his cooking pots. I paid him one dollar for it - about a day's work for him.

A small loan from the charity enables him to buy sheets of metal and increase his production rate. He can get a house for himself and his family with a roof on it. And in time, he will be able to send his grandchildren to school.

And this is the beauty of microbanking Opportunity International style. Their focus is on hard to reach rural communities, using innovative technology, such as biometric ID cards and mobile banks to circumvent barriers to inclusion.

Most people in rural Africa can't access banking facilities because they have to provide two forms of identity to get a bank account, usually a passport and a driving licence - they just don't have those. Often they live far away from banks and have no means of transport.

The biometric card allows them to open an account using just their thumbprint as ID. An added advantage of this scheme is that a husband can't get at his wife's money.

I can't tell you the sense of pride that emanated from the numerous people I met whose lives had been transformed by the trust that had been placed in them. In return, the default rate on these loans doesn't even register.

In a country racked by grinding poverty , still recovering from the famine a few years ago and where life expectancy is under 40, the work carried out by microbanking is truly uplifting.

The people are proud to have worked to move themselves out of poverty rather than have someone come in and do things for them.

Microbanking works from the ground up, rather than imposing top down solutions. A very Liberal Democrat way of doing things.

So, I would urge the drafters of this motion to include, in any further motion about development, the very important and growing contribution that microbanking could make to the delivery of financial structures to the rural poor in the developing world..

That is not to say that aid is not important. Leapfrog technology such as biometric cards is expensive; and the bank needs money to lend. In time it will be self sustaining but for now it needs funds to continue to grow its operation. This is an area on which we should place greater emphasis in future - because it is a very Liberal Democrat way of doing things.

I thank the drafters for bringing this motion to Conference and urge you all to support it."

End.