European Microfinance Week 2017

Cooperativa Tosepantomin of Mexico was announced as the winner of the European Microfinance Award 2017 by His Royal Highness the Hereditary Grand Duke of Luxembourg, accompanied by Her Royal Highness the Grand Duchess of Luxembourg and the members of the High Jury at the Award ceremony at the European Investment Bank on 30th November 2017.

The ceremony at the European Investment Bank (EIB) involved speeches by Dr. Werner Hoyer, President of the EIB; Mr. Romain Schneider, Luxembourg Minister for Development Cooperation and Humanitarian Affairs; and a keynote speech by Ms. Leilani Farha, the UN Special Rapporteur on the Right to Adequate Housing.

Beginning the ceremony, Dr. Hoyer welcomed everyone and outlined the scale of the challenge in providing adequate housing and finance for the 1.6 billion people who need it. Noting that the EIB's microfinance operations are a small part of its portfolio, they nevertheless have high impact, fostering social inclusion and measurably increasing employment in targeted areas. With so much of microfinance used by end-clients for housing purposes, these operations have a huge, indirect, leveraged impact on clients' access to sustainable and affordable housing.

Housing is much more than shelter, Dr. Hoyer said, and touches on many key social challenges - safety, sanitation, security and health among them. The work being done in financial inclusion on increasing access to housing finance is key to addressing the challenges of low and volatile incomes, lack of collateral, lack of guarantees, and limited access to quality materials and expertise. Housing microfinance recognises that most improvements in housing in low-income populations involve incremental building, and needs to address the unsafe and incomplete constructions that these building processes can leave behind. The Sustainable Development Goals, he observed, in particular SDG 11 - Make cities and human settlements inclusive, safe, resilient and sustainable - embed these principles in the global compact, and housing microfinance is a key
channel to achieve this goal.

A short film then presented how Kashf Foundation (Pakistan), the winner of the previous year's Award on Access to Education, had used the €100,000 prize. Ms. Roshaneh Zafar, Founder and Managing Director, was featured, explaining how the prize allowed Kashf to invest further in the quality of teaching through teacher training in the Low-Cost Private Schools, as well as investing in further child safeguarding, especially in protection from sexual abuse. Finally, in light of the massive growth in demand for places at Kashf's Low Cost Private Schools, Kashf is investing in expansion of facilities and teaching to manage what is forecast to be an enrolment of one million children within three years.

Leilani Farha, the UN Special Rapporteur on the Right to Adequate Housing, gave the event's keynote speech, a heartfelt critique of the "financialisation" and "commodification" of housing. Expressing awe at how much she had learned from the three Award finalists during her time on the High Jury, she explained that in her usual role as Rapporteur, usually she meets with people in camps, informal settlements, the "displaced, the resettled and the homeless". These are the people "who keep cities functioning", she claimed, but who are at the margins because housing is increasingly an investment asset class with excess capital pouring in, and "too often is no longer valued for its social function". This drives unaffordability, with house prices not commensurate with income, and low-income people are pushed out of areas where their social bonds are, and into sub-standard homes. "This is a human rights issue", she argued.

But the problems are not intractable. Housing crises are not due to lack of resources, or expertise, but lack of political will to act on the fundamental problem of inequality. Governments have ceded responsibility of housing to the private sector, but the microfinance sector has stepped in, and can play a critical role, through tailored financing for low-income groups, with the technical assistance in incremental building and home improvements and land title that these segments need.

Before the announcement of the winner of this year's Award, moving films documenting the housing finance programs of the three finalists - Cooperativa Tosepantomin from Mexico, Mibanco from Peru, and The First MicroFinance Bank-Afghanistan - were shown, followed by a speech by Romain Schneider, Luxembourg's Minister for Development Cooperation and Humanitarian Affairs, who took the stage to describe the various initiatives the Ministry is supporting. Minister Schneider emphasised Luxembourg's outsized role in this sector: it hosts one third of Microfinance Investment Vehicles, and half of sector Assets under Management. As part of the government's continued commitment to supporting the microfinance sector and the Award, he announced to loud applause that, for the first time, the two runners-up would also get a monetary prize - of €10,000 each - in addition to the €100,000 for the winner.

The members of the High Jury were then welcomed on stage, and Cooperativa Tosepantomin was announced as the winner, with the prize accepted by the Chairman of its Board of Directors, Álvaro Aguilar Ayon. In a short acceptance speech, he thanked the organisers, expressed his humility in the face of this honour, and said that the choice of Housing as the topic of this Award confirms what he and his colleagues have always known - the central importance of ensuring adequate housing that is sustainable, high quality, and affordable. He finished his speech with an impassioned call for greater cooperation through an "alliance" within the industry to expand programs like this to the millions who need them.