Cablegate: Canada Announces Over C$40 Million in Microfinance

VZCZCXRO0573
PP RUEHGA RUEHHA RUEHQU RUEHVC
DE RUEHOT #3487/01 3322011
ZNR UUUUU ZZH
P 282011Z NOV 06
FM AMEMBASSY OTTAWA
TO RUEHC/SECSTATE WASHDC PRIORITY 4522
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE PRIORITY
RUEHLM/AMEMBASSY COLOMBO PRIORITY 0284
RUEHCO/AMEMBASSY COTONOU PRIORITY 0040
RUEHBUL/AMEMBASSY KABUL PRIORITY 0093
RUEHMU/AMEMBASSY MANAGUA PRIORITY 0083
RUEHOU/AMEMBASSY OUAGADOUGOU PRIORITY 0117

UNCLAS SECTION 01 OF 02 OTTAWA 003487

SIPDIS

SIPDIS

STATE FOR WHA/CAN AND EB/IFD/ODF
STATE PASS USAID/EGAT

E.O. 12958: N/A
TAGS: EAID ECON EFIN CA
SUBJECT: CANADA ANNOUNCES OVER C$40 MILLION IN MICROFINANCE
PROJECTS IN SEVERAL LDCS

1. (U) Summary: At the November 12 Global Microfinance
Summit in Halifax, Canadian Foreign Minister Peter MacKay and
International Cooperation Minister Josee Verner announced
that Canada will provide more than C$40 million to three
Canadian NGOs to help poor people in developing countries get
access to formal financial services to improve their own
economic and social well-being. The FM said that "around the
world, the power of microfinance is transforming lives" and
noted that the Conservative government is a leader in
microfinancing in Afghanistan to foster self-reliance.
Minister Verner saw microfinance as "an important tool for
development" since it gives poor people, especially women,
the opportunity to access essential financial services so
that they can start and build their own businesses and
provide for their families. End Summary.

2. (U) The money will go to three Canadian NGOs with a track
record in microfinancing initiatives. Developpement
international Desjardins (DID) will receive C$19.85 million
to enhance access to financial services for the poor in 25
African, Asian, and Latin American countries and for outreach
activities in Canada. Working with local partners, DID will
focus on reducing poverty through increased access to
financial services, especially for women. DID has long
cooperated with the Canadian International Development Agency
(CIDA). Institutions supported by CIDA and DID currently
offer financial services that meet the needs of over 3
million people and have over 6,000 employees, some C$750
million in savings and assets of about C$1 billion. DID will
also receive C$1.3 million in support for the SANASA (Thrift
and Credit Co-operative Movement in Sri Lanka)'s post-tsunami
reconstruction and development efforts and the construction
of houses and playgrounds; lending and credit line services
for the most vulnerable; and reconstruction of financial data
lost during the tsunami. The project will help 75 to 80
credit unions to restart their operations in the districts of
Hambantota and Batticaloa. Among the SANASA federation
groups are 8,440 primary cooperatives with 858,000 members.
DID's website is http://www.did.qc.ca. Embassy note: DID is
a component of the Desjardin Group, an integrated financial
cooperative offering banking, insurance, securities and
investment services with over C$100 billion in assets. It is
the largest financial institution in Quebec. End note.

3. (U) Canadian Co-operative Association will receive C$19.5
million to continue the work of the program entitled
Sustainable Livelihoods through Cooperatives. Among its
activities, the program is developing and strengthening
community-owned financial cooperatives to increase the
self-reliance of communities, increasing food
self-sufficiency and access to markets, and helping to
develop locally controlled services to respond to the health,
housing and educational needs of poor communities in 17
African, Central Asian and South American countries. The
Association's website is http://www.coopscanada.coop/.

4. (U) Oxfam-Quebec will receive nearly C$150,000 for
microenterprise institutions in Burkina Faso and Benin. The
initiative aims to increase employment opportunities for
youth aged 18-35 in these countries through the creation of
Qyouth aged 18-35 in these countries through the creation of
microenterprise institutions. The project will also
facilitate networking in the field of entrepreneurship among
youth organizations in Benin, Burkina Faso, and Quebec. In
Burkina Faso, the project will work with two partner
organizations and target approximately 200 youth, while in
Benin, the project will work with 15 youth support groups and
will aim at helping about 1,000 youth. Oxfam-Quebec will
also receive C$145,000 to improve microfinance services in
the department of Esteli, Nicaragua, particularly for women.
This initiative will improve access to financial services,
increase agricultural productivity, and improve living
conditions for workers. Approximately 50 farm families
(especially those headed by women) in the towns of Congeda
and San Juan de Lamay will be reached by this project.
Oxfam's website is http://www.oxfam.qc.ca/.

5. (U) The new microfinance initiative builds on more than 30
years of CIDA efforts to expand microfinance, especially for
women, in the world's poorest countries. CIDA funding
initially supported the delivery of microcredit directly to
the poor, but over time, its assistance has become focused
more on the development of a wide range of microfinance
providers such as cooperatives, credit unions, NGOs, non-bank

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financial institutions, and banks that offer a wide range of
financial services to the poor.

6. (U) Averaging more than C$32 million a year over the last
five years, CIDA's microfinance assistance has evolved with
the growing self-sufficiency of microfinance institutions.
The GoC believes that microfinance is helping bring the world
closer to the Millennium Development Goal of cutting in half
between 1990 and 2015 the proportion of people whose income
is less than $1 a day. One important success story for
Canada's microfinance efforts is its over C$40 million
contribution to the Microfinance Investment Support Facility
for Afghanistan (MISFA), launched by the Afghan government in
2003. Canada is the facility's largest donor. According to
CIDA, MISFA now has more than 161,000 active loan clients, 73
percent of whom are women, and 98 percent of the loans are
repaid with interest. Most loans have helped launch small
retail businesses.

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