Chairperson, the ACDP firmly believes that co-operatives and micro enterprises can most definitely contribute to the reduction of poverty, to personal and group empowerment and to job creation in South Africa. Sustainable livelihoods are crucial for South Africa, with, as we know, high levels of unemployment and poverty presenting the most severe threat to social and political stability in the country.
Microfinance is, however, critical for the success of co-operatives and micro enterprises. We in the ACDP would like to focus on this today. Microfinance is the supply of credit and other basic financial services to poor and vulnerable people who might otherwise have no access to them or could borrow only on highly unfavourable terms.
Nobel Peace Prize winner and founder of the Grameen Bank in Bangladesh, Mr Muhammad Yunus, said:
All human beings are born entrepreneurs. Some get the opportunity to find this out, but some never get this opportunity. A small loan can be a ticket to exploration of personal ability.
The Grameen Bank successfully addressed the most serious obstacle facing the poor entrepreneur - that is access to credit. In a working capital poverty trap, a microentrepreneur has little or no inventory to be productive in sales. This bank illustrated how credit can be provided to the poor while minimising the risk that loans will not be repaid.
Since its founding in 1983, the Grameen Bank has enabled several million poor Bangladeshis to start or upgrade their small businesses. Significantly, 97% of the borrowers are women, with high rates of repayment. To qualify for loans without collateral, potential borrowers form five-member groups which undergo training and meet weekly with a bank official. They rely mainly on what is termed collateral peer pressure, with strong social pressure in the group on members to repay. Through this process, Bangladesh transformed itself from a symbol of famine to a symbol of hope.
South Africans can undoubtedly learn from this experience. Microloans play an important role in start-up capital for small businesses in the country. Can one not take this concept further? For example, could our present stokvels not be transformed into something similar, where members of stokvels who contribute monthly are then able to access microloans to start small businesses? This, we believe, should be investigated by the existing microfinance institutions.
As far as co-operatives are further concerned, as other speakers have pointed out, South Africa has a rich history. As the ACDP, we believe that we should build on this to the betterment of all in society.
To conclude, the ACDP supports expanding the opportunities for sustainable livelihoods through increasing support for co-operatives and micro enterprises. We believe that microfinances can play a crucial and important role in this regard. I would like to thank the hon Mr Mabasa for the topic for debate. I thank you. [Applause.]