AFI becomes fully-independent, member-supported organization

On 27 January, history was made as AFI completed the final steps in its evolution from a donor-funded project into a fully-independent and member-supported organization.

“This is an historic moment for our network and for financial inclusion,” said Alfred Hannig, Executive Director at AFI. “Establishing AFI as an independent, member-owned organization is a clear recognition of the value of our peer-to-peer learning approach and of the positive impact our members are making on the lives of the world’s unbanked.”

AFI’s story began in 2008 with a seemingly simple idea about tapping into the potential of financial inclusion through the unique knowledge and experience that was being rapidly developed throughout the developing and emerging world. “In the aftermath of the financial crisis, we could see that there were incredible innovations taking place in the field of financial inclusion,” explained AFI’s founder and current Executive Director, Alfred Hannig. “What was missing was a platform to connect those ideas and highlight the achievements that were being made to the broader community.”

The Bill & Melinda Gates Foundation (BMGF) was quick to appreciate the potential of this idea and provided the initial funding and support to make AFI a dedicated project. The new network also found support from Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) who provided AFI with its initial administration and logistic services. With funding and support in place, AFI introduced itself to the international community in 2009 at the first Global Policy Forum (GPF) in Kenya and began to see its membership quickly grow. Policymaking institutions from developing and emerging countries around the world were attracted to the subject area, but also to the way the network was organized.

An early champion of ‘country-led’ policy solutions, AFI used what was called a ‘polylateral’ approach, allowing its members to determine policy priorities, and creating an atmosphere in which all experiences and ideas were treated with equal respect. The strong emphasis on practical solutions specifically tailored to local conditions created a strong sense of ownership and pride. As a result, AFI members were able to make significant and rapid progress in reaching the unbanked.

The network members took a significant step at the 2011 GPF in Mexico, when the Maya Declaration was first introduced to the international community. The Declaration and the national commitments that followed over the next years became one of the organization’s defining achievements and its most important ongoing initiative.  Maya served to drive AFI’s expanding membership toward evermore ambitious financial inclusion targets, and demonstrated the power of country-led commitment processes. “Through Maya there is more than peer learning, there is also some peer pressure,” noted Bank of Tanzania’s (BOT) Governor Benno N’dulu. “You see others making progress and taking huge strides and it challenges you to make sure to follow suit.”

With its unique network and clearly defined agenda on an issue of rising international importance, AFI began to expand its engagement with key international organizations. Already a founding member of the G24’s Global Partnership for Financial Inclusion (GPFI), AFI also became a regular participant in meetings and conferences for the World Bank, International Monetary Fund (IMF), G20 and United Nations (UN), as well as engaging with the global Standard Setting Bodies (SSBs) on financial inclusion policy issues. For the first time, the views of policymakers from emerging and developing countries—where the majority of the world’s unbanked reside—had a strong and united voice in the forums where decisions were being made on the future of financial inclusion policy.

Although an independent AFI had been part of the vision since 2009, by 2011, AFI’s rapid growth and growing influence had convinced its members, along with its backers in BMGF, that the time had come to start planning for independence and the evolution into a permanent international organization. At the 2013 GPF, Bill Gates gave a keynote presentation via a video message welcoming the process and highlighting that, through independence, AFI’s bold agenda would be instrumental in, “making financial inclusion one of the innovations that revolutionize life for the poor.”

“We are thrilled to see AFI becoming an independent organization. This is a major milestone in the life of the Alliance and testimony of the important role AFI has been playing in promoting financial inclusion globally,” said Sacha Polverini, Senior Program Officer for Global Policy and Regulation, Financial Services for the Poor, at the Gates Foundation. “We look forward to continuing our collaboration with AFI to ensure a growing number of low income households has the possibility to access basic financial services and products in line with their specific needs and circumstances.”

AFI kicked off its independence process by seeking a location for a permanent headquarters through a public bidding process. In 2014, Bank Negara Malaysia (BNM) was selected to bring AFI to the Sasana Kijang complex in Kuala Lumpur. Following this, AFI members focused on creating and finalizing governance structures and systems while designing a membership fee structure that would ensure the organization could begin its independence on solid financial footing.

Meanwhile, by 2015 financial inclusion had completed its full transition from a fringe issue to a recognized fundamental policy development area when the United Nations General Assembly launched its Sustainable Development Goals (SDGs). The SDGs were backed by the Addis Ababa Action Agenda which took the unprecedented step of highlighting financial inclusion, promoting a country-led approach to targets and calling out AFI as the ideal partner in achieving this part of the SDG agenda. United Nations Secretary General Ban Ki Moon call the Agenda a ‘crowning achievement’ highlighting that, “the full implementation of the Addis Ababa Action Agenda is critical for the realization of the Sustainable Development Goals (SDGs) and targets.”

AFI enters 2016 as a new organization but one with a long and exciting evolution. Its journey as a donor project may have come to an end, but as the only independent international financial inclusion policy network, AFI is about to begin new chapter at a time when financial inclusion has become one of the greatest global drivers of development policy. Today over 85 percent of the world’s unbanked reside in countries with an AFI member institution, placing the network in a unique position to shape effective and practical policy solutions for the benefit of the world’s 2 billion unbanked.

AFI has evolved, but its core philosophy and the policy leadership and influence of its members remains. Together, with its partners from across the development landscape, AFI will continue to work tirelessly toward bringing smart policies to life.