The ILO, the private sector, and microfinance

Social finance, also known as microfinance, uses financial instruments to promote decent work. It means finance — sustainable finance — with a social goal. It is about credit, savings, insurance, remittances, financial literacy, social funds and other products that help the poor to cope better with risk, take advantage of income-generating opportunities, organize and have a voice.

It is also about promoting and encouraging institutions that cater to the financial needs of the working poor, including women’s groups and such major job creators as small and medium enterprises.

Social finance is about financial sector policies that set incentives to open up the financial sector to the working majority while creating an enabling environment in which microfinance institutions can operate.

ILO Public-Private Partnerships involving support to microfinance cover many sectors, including entrepreneurship education - in particular for young people, and for men and women, support to small and medium enterprises, protecting the working poor, programmes to combat HIV and AIDS, and post-disaster economic reconstruction, as well as research into financial markets.

In such partnerships the ILO works with its network within the ILO - governments, trade unions, and employers’ organizations; and external partners, including financial sector players, networks, associations, and the private sector.