Inclusive financial technology (FinTech), gender and green finance were top of the agenda during a bilateral meeting between International Monetary Fund (IMF) Managing Director Kristalina Georgieva and AFI Executive Director Dr. Alfred Hannig.
Georgieva welcomed Dr. Hannig at IMF’s headquarters on 27 February in Washington, D.C. to explore avenues that expand cooperation between the two institutions in shared areas of policy priority.
She noted that the IMF and AFI were already closely engaged in several topics, which has been highly beneficial to both, adding that the two sides should work more closely together to achieve their common goals.
The leaders discussed how to leverage FinTech to increase the quality and usage of financial services, as well as how to scale support for developing countries in prioritizing gender inclusive finance and inclusive green finance (IGF) through the use of emerging digital technologies.
Georgieva and Dr. Hannig also discussed the convergence of policy priorities around risks linked to emerging technologies, adding that the digital divide between developed and developing economies was closing quickly.
An increasing number of AFI members are embracing inclusive FinTech in their markets and are implementing innovative policy solutions to enable home-grown FinTech innovations. Their national experiences and policy lessons have become highly coveted by developed country peers.
Furthermore, Georgieva and Dr. Hannig agreed that FinTech can be a “big equalizer” that has the potential to bring many millions of poor people out of poverty and advance financial inclusion for the most vulnerable populations, including those forcibly displaced through conflict and natural disasters. Consequently, it is important that the two institutions explore together how to mitigate potential FinTech risks and ensure that the opportunities inherent in these emerging innovations are not missed.
This is especially true for IGF, where there are numerous complementarities in the work and aspirations of both institutions. As such, there was strong shared interest in exploring how and what these new technologies can bring to advance the global climate agenda, especially in building resilience and adaptation.
At the same time, the two leaders agreed to identify opportunities to collaborate in future advocacy efforts that amplify the collective voice of developing and emerging economies on climate change.
Strengthening cooperation between the two institutions was also agreed to be instrumental in leveraging emerging technologies to close the financial inclusion gender gap and boost the access, usage and quality of financial services for women entrepreneurs and women-owned micro, small and medium enterprises.
Furthermore, both organizations agreed that it was important to collaborate on data collection and analysis for inclusive gender and green finance, where IMF’s strong diagnostic capacity can complement the work of AFI members in collecting and analyzing data.
As the first meeting between the two officials, it provided an excellent opportunity to express openness and willingness for more structured cooperation in critical and pressing policy areas in future.
As the first IMF managing director from a developing economy, Georgieva has experienced first-hand the risks of financial instability and exclusion. She has been described as one of the most vocal proponents in the fight against climate change, viewing it as an existential threat to the gains made in development. If left unchecked, she thinks that climate emergency risks could undermine financial stability.
This is a view that is shared by the AFI membership, which in September 2017 adopted the Sharm El Sheikh Accord on Financial Inclusion, Climate Change & Green Finance. The Accord commits AFI members to work together and with partners to identify, understand and implement financial inclusion policy solutions that also have positive outcomes for the environment, optimizing use of emerging technologies and focusing on communities that are most vulnerable to climate change.