10 May 2022
We are back!
Co-hosted with Superintendencia de Economia Popular y Solidaria (SEPS), AFI is holding its first in-person working group meetings from 9 – 12 May 2022. Smiling, meeting and greeting each other after two years, over 50 members of AFI’s Financial Inclusion Strategy Peer Learning Group (FISPLG) and Inclusive Green Finance Working Group (IGFWG) from around the world have travelled to Quito, Ecuador to take part in the meetings.
With the global economy still in recovery from the pandemic, AFI members are intensifying efforts to accelerate effective, targeted and sustainable financial inclusion policy and regulatory solutions. This week will see the launching of the three knowledge products by FISPLG as well as the Environmental and Social Risk Management (ESRM) Guidelines by SEPS, developed as part of AFI’s in-country implementation (ICI) program.
Welcoming participants to Quito, SEPS Superintendenta Margarita Hernández described the week of events as a milestone in working together on developing sustainable economies.
“I would like to express my most sincere gratitude to the Alliance for Financial Inclusion that saw Ecuador, a place where nature is prodigal and generous, as the propitious setting to work on the importance and impact of financial inclusion and green finance”, Superintendent Hernández highlighted.
SEPS shared its financial inclusion journey and lessons learned, including those experienced during the COVID-19 pandemic, as part of the convergence session on the first day of the meetings. Working group members also deliberated about how regulators are strengthening climate resilience, managing climate related risks, mobilizing capital for resilience building and low carbon development and promoting financial inclusion. Members presented national strategies that pursue higher levels of financial inclusion, including green approaches that help achieve economic growth.
Allowing AFI to leverage on regional opportunities and return to organizing in-person meetings, SEPS moved fast at the end of last year and worked with AFI to co-host first in person regional capacity building event.
FISPLG turns 10
This year, FISPLG is celebrating its 10th anniversary. As a platform for important financial inclusion components such as gender, inclusive green finance or digital financial services, FISPLG has been instrumental in promoting the effectiveness of developing and implementing a National Financial Inclusion Strategy (NFIS). To this date, 63 AFI members have a NFIS, representing 85% of all countries with an NFIS.
During the meeting in Quito, FISPLG is launching three new, cutting-edge financial inclusion knowledge products, holding special sessions to present each:
SEPS launches Environmental and Social Risk Management (ESRM) Guidelines
With inclusive green finance (IGF) policy area pioneered by AFI members implementing policies, regulations and national strategies focused on building resilience to climate change, the IGFWG now includes 59 member institutions from 52 countries. So far, AFI members reported eleven IGF policy changes and this week will see the launch of one such significant reform.
Officially launching its own Environmental and Social Risk Management (ESRM) Guidelines today, SEPS, joins the ranks of other member institutions that have issued ESRM policies to properly manage environmental risks in the overall quality of their portfolio.
The ESRM aims to boost financial inclusion in its credit cooperative sector, especially in support of low-carbon projects and initiatives for build climate resilience among vulnerable communities. The guidelines were successfully completed with support from AFI through its In-Country Implementation Program.
“The ESRM guideline will make it possible to identify, categorize, monitor and evaluate possible environmental risks in the credit portfolios, encouraging a culture and commitment to social and environmental responsibility in the financial system,” Superintendenta Hernández underscored in her opening remarks.
Besides Ecuador, ESRM guidelines have been also issued by Bangladesh, Nepal, Paraguay and the Philippines.
This policy change is a milestone not only for SEPS and Ecuador, but also for the greater inclusive green finance objectives of the network, AFI Director of Policy Programs & Implementation Eliki Boletawa said. The guidelines also showcase AFI’s national policy development support under its In-Country Implementation program.
“We are proud to witness significant developments in inclusive green finance, which not only highlight the important role of financial regulators in supporting an inclusive global climate action, but also align with the 2030 Sustainable Development Goals”, highlighted Director Boletawa in his remarks.
He congratulated SEPS on successfully developing guidelines that incorporate appropriate risk mitigation measures in overall credit management. Boletawa underlined that this is a policy example that will not only benefit SEPS and Ecuador but the greater global inclusive green finance agenda because it exemplifies what is meant by ‘just transition’ to a more sustainable, low-carbon, and resilient economy, a policy that helps ensure that no one is left behind.”
With financial regulators from over half of the world’s top 20 most biodiverse countries represented in the AFI network, the IGFWG will also discuss on the role of central banks in incentivizing diversity and ecosystem conservation, as well as management and restoration of the environmental diversity. Among the concerns for the working group are unsustainable fishing and agricultural practices, clearing of land for agriculture and living spaces, as well as land and water pollution.
Working Groups as “communities of practice” on financial inclusion
As a driver of financial inclusion growth, FISPLG also provides a platform for other working groups to leverage their expertise from the angle of a country’s financial inclusion strategy. One of the working group’s notable achievements has been the launch of the National Financial Inclusion Strategy Monitoring and Evaluation Toolkit, which offers practical guidance in systematically and efficiently monitoring and evaluating progress and results of NFIS interventions aimed at promoting financial inclusion.
IGFWG, as a pillar of AFI’s inclusive green finance workstream, contributes to the network’s globally leading role in this policy area. Many members already carry the heavy burdens associated with climate change impacts and have demonstrated the pioneering knowledge and expertise needed to design and implement effective solutions.
The two working groups recently joined forces and developed the Guideline Note on Integrating Inclusive Green Finance Policies into National Financial Inclusion Policies to support AFI member institutions in accelerating the development of IGF policies that enhance sustainable potential for economic growth and manage the financial risks associated with the impacts of climate change. This guideline note was designed for institutions looking to incorporate IGF into their national financial inclusion strategies (NFIS).
AFI’s working groups are the key source of policy development and trends in financial inclusion and serve as “communities of practice” on key financial inclusion issues. They are the primary mechanism for generating and hosting knowledge within the AFI network and provide a platform for knowledge exchanges and peer learning that allow policymakers to share, deliberate and deepen their knowledge and understanding of key financial inclusion issues.
AFI’s 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.