“Microfinance allows poor people to generate their own income”, said Peter Fanconi at the University of Navarra. The CEO of Blue Orchard, a pioneering company in this field, explained to the students how non-collateral loans can help tackle poverty in developing countries.

Fanconi’s microcredit project is intended for people living on just two or three dollars a day. “Poor people don’t have enough money to buy a couple of apples. How can you ask them for collateral? Their collateral is their only means of getting their family out of poverty”, said Fanconi.

According to the CEO, whose company has invested more than 3.5 billion dollars in 60 countries, the microcredit system is a way of “achieving economic sustainability and guaranteeing that those living in poverty can achieve a better quality of life”.

He also clarified that this form of financing serves a double purpose: “Investing in microcredits generates a social and a financial impact. It benefits everyone, from the public or private investor to the loan recipient.” This dual impact is also the result of a multiplier effect, since, according to Fanconi, “for every million euros we receive, at least 200 individual loans are generated”.

The CEO pointed out that the microfinance industry is still largely unknown, but highly sustainable, since these microcredits don’t involve the pitfalls of regular investments. “The impact of the investment is not immediate, but long term, so things like the Trump phenomenon and economic crises don’t affect us so much”, he said. “We don’t depend on current affairs to such a great extent.”

Fanconi also referred to “the fascinating aspect of the industry”, which he has observed through his own experience: “It’s an incredible fact that all men, in all countries, regardless of their religion or situation, are concerned with just one thing: doing what is best for their family.” He concluded his lecture by pointing out that the microfinance industry owes its existence to the former Secretary-General of the United Nations, who promoted the project to achieve one of the eight Millennium Development Goals: to eradicate poverty.