A look inside Luxembourg’s inclusive finance ecosystem

An interview with Anne Bastin, Executive Director, Inclusive Finance Network Luxembourg (InFiNe)

Firstly, can you tell us what InFiNe is? InFiNe is a platform that brings together the various Luxembourg public, private and civil society actors involved in inclusive finance. The network was created in 2014 to promote financial inclusion as a tool for poverty alleviation and empowerment of low-income groups. We aim to capitalize on Luxembourg’s leading position in finance and development to foster the deployment of inclusive finance worldwide.

Can you map out Luxembourg’s inclusive finance ecosystem for us?

InFiNe’s members include the Luxembourg Bankers’ Association, the European Investment Bank, fund managers, The Luxembourg Development Cooperation Agency, not-for-profits, law firms, the big four professional services firms, and consultants. Every big investment company or bank here now tries to allocate some funds to inclusive projects. We also have NGOs and civil society actors like ADA, specialized in the field with 30 years of experience in inclusive finance. For Care and Handicap International, while inclusive finance isn’t their core business, they’re doing really interesting projects, for example CARE is working to develop digital inclusive finance in Egypt and Niger.

The Ministry of Foreign and European Affairs, Directorate for Development Cooperation and Humanitarian Affairs is an important supporter of inclusive finance, while Luxembourg’s Development Cooperation Agency (LuxDev) has supported the development of the microfinance and inclusive finance sectors for over twenty years.

And then we have members like LHoFT, Luxembourg’s Fintech startups innovation hub, as well as innovative asset managers like Bamboo Capital Partners and Finance in Motion, which seek to generate positive change in emerging markets via impact-driven investments. We also have new members such as ICFA or GGGI who are directly involved in Climate Finance.

InFiNe now has 39 members, all working in the field of inclusive finance and based in Luxembourg.

That’s a lot of inclusive finance actors for such a small country…

Luxembourg’s small size has actually been an enabling factor for the ecosystem to grow. We’re all in close proximity. Everybody knows each other and talks easily to each other. Recently, Xavier Bettel, Luxembourg’s Deputy Prime Minister and Minister of Foreign and European Affairs, Defence, Development Cooperation and Foreign Trade, was here at the Maison de la Microfinance, meeting all of Luxembourg’s financial inclusion actors.

Luxembourg is a leading cross-border financial center, and a reference point for sustainable finance. The strength and international recognition of our financial center, combined with its ability to be innovative and anticipate changes in the industry, has helped inclusive finance to take off, just as it did previously with microfinance and impact investing.

There’s also strong political commitment to development, which holds true from one government to another. Luxembourg was one of the first countries to commit to contributing 1% of GDP towards development.

How well do these different actors work with each other?

The spirit here is very collaborative. And that’s pragmatic. When you’re a small country, if you don’t work together, you won’t get anywhere. The bigger countries will dominate the space.

In other places, you see a gap between private and public sector stakeholders; they’re not really talking to or understanding each other. Here, on the other hand, relations are very smooth. There’s a permanent interaction among the members of the ecosystem that creates an environment of collaboration and synergy.

It also helps that we’re a multicultural society. We’ve got people from different backgrounds, speaking multiple languages, working to build a common vision for inclusive finance. I feel that’s a real treasure.

How does InFiNe help to advance inclusive finance?

We spread awareness of how Luxembourg actors are achieving impact on the ground. We coordinate the ecosystem during public forums and conferences and facilitate networking opportunities for them.

We provide capacity building support by running workshops and trainings, and disseminating best practice, organizing regular conferences and seminars. We also offer scholarships of up to 4000 EUR per employee of our member institutions.

We also organize the European Microfinance Award ceremony together with e-MFP: last year’s theme was food security and nutrition, and a small Microfinance Institution in Burkina Faso, YIKRI, won 100 000 EUR. This year the topic is Refugees and Forcibly Displaced People.

Each month, we hold an in-house knowledge sharing event. One member will present on what they’re doing around a particular theme, for example on climate finance, and then we’ll have an open discussion.

If you ask our members, what they value most from InFiNe are not our expert workshops or our publications, but rather the opportunity to connect and exchange with their peers. For example, our networking dinners are great ways to spark a new project or collaboration.

You can discover more about InFiNe on their website, and learn about the cooperation agreement between AFI and the Government of Luxembourg here.