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Why the ILO?

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The International Labour Organization (ILO) invests in microfinance, and in the capacity building of MFI managers in particular, because it believes that microfinance can help realize its vision of decent work for all. Microcredit and micro-leasing products provide opportunities for small investments in self-employment and job creation. Emergency loans, savings and microinsurance provide the means for poor people to better cope with risk. When microfinance is delivered through group-based models, it can provide opportunities for the poor to organize and have a voice. Some MFIs, particularly those that partner with other public or private actors in pursuit of a social mission, are actively discouraging child and bonded labour, and helping microentrepreneurs to grow and formalize.

As the focal point for microfinance within the ILO, the Social Finance Programme initiated the development of the Making Microfinance Work curriculum in 2003, building on another area of ILO expertise and concern—management. The ILO has a long history of involvement in strengthening management practices as a strategy for improving labour relations and working conditions. Its International Training Centre (ITC ILO) in Turin, Italy has been developing and delivering management training curricula for more than four decades. It brought this experience to bear when it joined forces with the Social Finance Programme to develop the Making Microfinance Work management training and trainer certification program.

The end result is a quality product that draws from management experiences both within and outside of the microfinance industry. It incorporates the perspective of a wide range of actors, including regulated financial institutions, governments, trade unions and non-governmental organizations. The ILO’s unique governance structure, in which workers, employers and governments participate equally in decision-making, puts it in a privileged position to explore how public and private sector actors can work together to expand the outreach and impact of microfinance. Through MMW, the ILO hopes to facilitate broader and more innovative use of financial services to help create decent work for all low income people. The course is a natural complement to other training packages created by the Social Finance Programme and ITCILO, most notably on leasing, microinsurance and guarantee funds.