The founder and president of an international group promoting microfinance, a type of small-lot lending for low-income people who cannot put up collateral, has urged Japan to make more use of the tool to improve its official development assistance.

"Japan is the second- or third-largest ODA provider in the world. Therefore, I believe there is a huge role for ODA in microfinance," said Jacques Attali, 63, former special adviser to the late French President Francois Mitterrand and creator of the Paris-based PlaNet Finance, in a recent interview in Tokyo.

There is a "huge need" for capacity building for microfinance institutions that extend loans to the poor, Attali said. If Japan's ODA is used to improve skills at those institutions, Japan's ODA "can be visible, efficient with very low costs."