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IGF resources

National financial sector strategies

Regulators in the AFI network have begun responding, often with urgency, with strategies, policies and regulations to mitigate and build resilience to the impacts of climate change in their respective countries. There is an emerging trend in the network to link financial inclusion and climate change on a national strategic level, either in a national financial inclusion strategy (NFIS) of other financial sector strategies.

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NFIS with green elements

Argentina

• National Financial Inclusion Strategy (2019)

Bangladesh

• National Financial Inclusion Strategy

Fiji

• National Financial Inclusion Strategic Plan 2016–2020

Jordan

• National Financial Inclusion Strategy 2018-2020

Philippines

• National Financial Inclusion Strategy 2022-2028

Rwanda

• Rwanda Financial Inclusion Program (2015)

Solomon Island

• National Financial Inclusion Strategy 2021-2015

Sao Tome and Principe

• National Financial Inclusion Strategy 2021-2025

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Other related financial sector strategies

Bangladesh

• Policy Guidelines for Green Banking (2011)
• Bangladesh Bank Strategic Plan 2020-2024
• Sustainable Finance Policy for Banks and Financial Institutions

China

• China’s National Plan on Implementation of the 2030 Agenda for Sustainable Development
• Guidelines for Establishing the Green Financial System
• China Green Bond Endorsed Project Catalogue (2015)
• Green Credit Guidelines

Egypt

• Guiding Principles on Sustainable Finance (2021)

Ghana

• Sustainable Banking Principles and Sector Guidance Notes

Kenya

• Guidance on Climate-related Risk Management (2021)

Malaysia

• Climate Change and Principle-based Taxonomy

Mongolia

• National Sustainable Finance Roadmap (2018)
• Mongolian Green Taxonomy
• Green Development Policy

Morocco

• National Roadmap for Aligning the Financial Sector with Sustainable Development

Nigeria

• Principles of Sustainable Banking (2012)

Philippines

• Sustainable Finance Framework
• The Philippine Sustainable Finance Roadmap (2021)
• The Philippine Sustainable Finance Guiding Principles (2021)

Russia

• Russian Green Finance Guidelines

South Africa

• South Africa Green Finance Taxonomy

Sri Lanka

• Roadmap for Sustainable Finance in Sri Lanka

Thailand

• Sustainable Banking Guidelines
• Sustainable Finance Initiatives for Thailand
• Sustainable Financing Framework

AFI member institutions on the 4Ps of inclusive green finance

AFI’s 4P framework provides financial regulators with an intuitive was to consider the full range of policy actions they can take for inclusive green finance. All  policies under the 4Ps either catalyze financial services for the private sector or use financial infrastructure to deploy finance for climate action.

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Promotion

Promotion policies and initiatives prepare the private sector to offer financial services for green projects or related climate action activities to qualifies beneficiaries, for example, through awareness raising, information sharing, capacity building and data collection.

Bangladesh

• Publishes Quarterly Report on Green Banking Activities of Banks & Financial Institutions and Green Refinance Activities
• Sustainability Ratings for Banks and Financial Institutions
• Target and Achievement of Sustainable Finance and Green Finance

Bhutan

• National Stakeholder Capacity Building and Coordination Workshop for the upcoming Inclusive Green Finance Roadmap

Cambodia

• Encouraged commercial banks to repackage loans for populations affected by disasters

Egypt

• Conducted capacity building on sustainable finance

Fiji

• Fiji Financial Services Demand Side Survey 2020

Morocco

• Sensitization and awareness raising on green finance and climate risks in the financial sector
• Finalizing regulatory directive on climate change-related risks

Philippines

• Knowledge sharing and awareness raising on sustainable finance
• Conducts Banking Sector Outlook Survey (BOS) regularly
• Research and data gathering on the impact of disasters to banking operations

Thailand

• Capacity building on ESG risks
• Established a regulatory working group on sustainable finance comprised of the Ministry of Finance, the Securities and Exchange Commission, the Office of Insurance Commission and the Stock Exchange of Thailand

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Provision

Provision policies help to ensure financial resources for green projects or related climate action activities are provided for qualified beneficiaries, whether through lending policies, refinancing or other financing schemes.

Argentina

• Relaxed conditions for loans packaged with climate insurance

Armenia

• Offered longer term financing to financial institutions to on-lend to MSMEs for products such as renewable energy

Bangladesh

• Introduced an annual green finance regulatory target equivalent to 5% of loans disbursed
• Use of refinancing facilities to promote low carbon technologies

Egypt

• Required banks to allocate 20% of their portfolio to finance MSMEs including renewable energy and climate-resilient irrigation
• The Central Bank of Egypt issued circular that provides a discounted rate for local bakeries to convert into the use of natural gas
• The Central Bank of Egypt launched a EGY15million fund to support transition to the use of natural gas in the transport sector

Eswatini

• Offers financial services for climate-smart technologies to build resilience into agricultural supply chains

Fiji

• Issued a renewable energy loan ratio requirement equivalent to 2% of deposits and similar liabilities

Jordan

• Medium-Term Advances to Licensed Banks Program provides subsidized loans for critical development sectors including renewable energy and agriculture

Morocco

• Creation of Innov Investment Fund to support start-ups including renewable energy and cleantech

Nepal

• Directed all banks to dedicate 10% of their portfolio to green projects
• Refinancing facilities for banks to offer subsidized loans for green technologies,
• Refinancing facilities for subsidized loans to rebuild from floods and fires, modelled on a program that supported post-earthquake recovery and reconstruction

Pakistan

• Financing scheme for Renewable Energy Projects from 2017 to mid-2019

Peru

• Rescheduling of retail loan payments in the event of a disaster

Philippines

• Developed Agricultural Value Chain Financing Framework which allows banks to include disaster contingency mechanisms in place
• Provision of temporary regulatory relief measures to banks affected by disasters

Seychelles

• Lower interest loans to MSMEs and to households through the Seychelles Energy Efficiency and Renewable Energy Program (SEEREP) SME loan scheme

Sri Lanka

• Moratoriums on loan repayments for affected borrowers by disasters

Vanuatu

• Assists businesses affected by Tropical Cyclone Pam through concessional lending to commercial banks at interest rates of one percent via the Vanuatu Disaster Reconstruction Credit Facility
• Lowered the reserve requirement for commercial banks by two percentage points (from seven percent to five percent) to incentivize banks to lend to affected low-income households

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Protection

Protection policies reduce financial risk by “socializing” potential losses through insurance, credit guarantees, socializing payments or other related risk-sharing mechanisms.

Armenia

• Establishment and supervision of the Agricultural Insurers’ National Agency (AINA), a public-private partnership for agriculture insurance market development

Fiji

• Use of mobile payments to disburse funds from its “Help for Homes Initiative” to people affected by Tropical Cyclone Winston
• Allowed people to withdraw 20 percent from their retirement accounts to rebuild their homes
• Fiji National Provident Fund provided relief assistance to members through its retirement fund
• Established Fiji’s Natural Disaster Rehabilitation Facility, a climate resilience and adaptation program to replace damaged inventory; cover the loss of sales, including working capital; repair or replace damaged plants, equipment and machinery; restore damaged buildings, including resorts and hotels; and replace business vehicles for affected businesses and homeowners

Ghana

• Supported the development and initial implementation of the Ghana Incentive-Based Risk-Sharing System for Agricultural Lending (GIRSAL) to increase the total amount of credit available to the agriculture and agribusiness sectors

Morocco

• Introduced climate multi-risk insurance products to protect investments in major cereal crops from climate-related damages, including drought, excess moisture, hail, frost, wind and sandstorms

Nigeria

• Established the Anchor Borrower’s Program to link smallholder farmers with large-scale processors to alleviate the impact of climate change including revenue index insurance
• Provides subsidies to incentivize bank lending to smallholder farmers facing climate risks
• Guaranteed 50 percent of the loss if a smallholder farmer cannot repay a loan through Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) through bundling climate risk insurance with subsidized lending and credit guarantees

Philippines

• Launched the Countryside Financial Institutions-Calamity Assistance Program in 2007 to help fund early recovery and reconstruction activities in areas affected by typhoons, disasters and other natural calamities

Peru

• Approved an innovative contingency insurance product for business interruption specifically designed for MSMEs and MFIs

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Prevention

Prevention policies aim to avoid undesirable outcomes by lowering financial, social and environmental risks.

Bangladesh

• Introduced Environmental Risk Management (ERM) Guideline and Environmental Due Diligence Checklists (2011) to regulated financial institutions

Brazil

• Issued detailed guidelines to support the adoption of a Social-Environmental Responsibility Policy (Política de Responsabilidade Socioambiental, or PRSA) and made the application of these guidelines a condition for commercial banks to operate

Nepal

• Adopted Guidelines on Environmental and Social Risk Management for Banks and Financial Institutions (2018), which apply to bank lending for SME finance, commercial leasing, term finance and project finance

Pakistan

• Issued Green Banking Guidelines with a sizable section on ERM (2017) that offers guidance to banks on developing their own green financing products and services

Paraguay

• Flexible Guide for the Management of Environmental and Social Risks (2018) that encourages including non-financial risk in credit decisions

Philippines

• Environmental and Social Risk Management Framework (2021)

AFIs Inclusive Green Finance (IGF) workstream is part of the International Climate Initiative (IKI)  supported by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), based on a decision of the German Bundestag.

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