9 May 2022
Honorable Margarita Hernández, Superintendente, Superintendencia de Economía Popular y Solidaria (SEPS), Chair & Co-Chairs of the Financial Inclusion Strategy Peer Learning and Inclusive Green Finance Working Group, Members of the Working Groups, Lladies and Gentlemen.
¡Muy buenos días a todos! A very good morning to you all!
It is with great pleasure that I welcome you to the convergence meeting of the Financial Inclusion Strategy Peer Learning Group and Inclusive Green Finance Working Group. Allow me Honorable Margarita Hernández, to express my sincere gratitude to you, the Superintendencia de Economía Popular y Solidaria de Ecuador (SEPS), as well as the planning team for the excellent support in co-hosting this first in-person working group meeting since 2019!
In these regards, on behalf of the Executive Director, Dr. Hannig, and the Management Unit in AFI, we wish to reiterate the AFI satisfaction of being able to join today physically, after more than two years of global hardship and uncertainty, given the COVID-19 pandemic. We are excited to share that the first series of WG meetings for 2022 after a lapse of 2 years is being hosted by three members in the Latin American & Caribbean region, showcasing regional leadership within the AFI network. We highly appreciate the commitment, engagement, and flexibility of AFI member institutions. SEPS Ecuador, the first co-host of the WG meetings have willingly and continuously kept the needle moving in terms of financial inclusion policymaking, even in such difficult circumstances as the ones presented globally during the last years.
Having joined the AFI network in 2019, SEPS is now not only the first Latin American member to co-host the physical working group meetings in the post-COVID-19 era but is also a leader in adopting the inclusive green finance agenda in the region. SEPS has come very far in drafting an environmental and social risk management guideline for cooperatives, a first ESRM guideline that has been developed through AFI’s In-Country Implementation Program and which is specific to and perhaps the only one in the cooperative sector. These ESRM guidelines will aim at limiting any environmental and social risks arising from credit decisions that will align the cooperative sector towards a greener pathway and further foster green finance in the country. As part of SEPS’ Maya Declaration commitments on financial inclusion, the guidelines will help bring the country closer to the fulfillment of their national climate pledges under the Paris Agreement. In addition, Ecuador will also soon be part of the, currently quite exclusive, group of AFI members with a third iteration of their NFIS since they are currently half-way in the implementation of their second NFIS (2020-2024).
Undoubtedly we can all learn from other countries which have broad financial inclusion experience over a longer period of time, and we are looking forward to hearing more on Ecuador’s Financial Inclusion Journey during today’s convergence meeting.
SEPS has stood out for its leadership role and commitment within the AFI network and has been a fast mover in terms of bringing AFI back to normal when after two years in November 2021, they hosted the first hybrid Regional Training on Inclusive Green Finance and Gender Policies which was of highlight importance for participants to identify the various dimensions and approaches to integrate gender in their national financial inclusion strategies. I would like to emphasize that we are grateful for your support in hosting this Working Group meeting which shows how our relationship has grown and strengthened over time, and the fact that you’ll be sharing your thoughts and lessons learned during your financial inclusion journey, including those experienced during the COVID-19 period epoch, is a mark of commitment to the AFI network.
The last two years AFI members faced unique, unprecedented challenges in their respective financial ecosystems because of the COVID-19 global pandemic. The ensuing effects have been more protracted for developing and emerging economies and have undoubtedly affected the vulnerable and disadvantaged populations disproportionately. During these difficult times, AFI members have responded appropriately with actions, policies, and interventions to ensure business continuity, market stability and consumer protection. AFI has offered a platform to its members to quickly learn from each other’s actions which enabled members to select appropriate measures in a timely manner.
As 2022 begins, COVID-19 and its economic and societal consequences continue to pose a critical threat to the world. Resultant uneven economic recovery risk compounding social fractures and geopolitical tensions.
While the global economy is showing early but very fragile signs of economic recovery, we need to take into account the fact that this economic recovery is uneven and the resulting global divergence will create tensions within and across borders which complicates the coordination needed to tackle common challenges including strengthening climate action. Yet, it is within this changed economic environment that we should intensify our efforts in identifying and creating new opportunities which will not only enable us to return to pre-COVID-19 financial inclusion levels but exceed those levels.
Undertaking appropriate and effective actions will help create a solid policy and regulatory foundation on which sustainable financial inclusion activities can be built with the ultimate aim of elevating financial inclusion levels and reversing the impact of COVID-19 on financial inclusion.
The FISPLG and IGF Working Group meetings that will be taking place this week are testimony of the progress made by AFI members in propelling financial inclusion forward. Over the last few years, financial regulators and central banks recognized the multidimensional risks that climate change can have on financial inclusion efforts and financial stability in general. Some have already taken the holistic approach to integrate green elements into their national financial inclusion strategies while some have ensured that IGF is integrated in their other financial sector strategies or the “inclusion” element in their green finance strategies. Such approaches ensure that vulnerable groups are included in the national transition to low-carbon, resilient, and sustainable economies.
The Financial Inclusion Peer Learning Group (FISPLG) is the driver of financial inclusion growth which is achieved through support and guidance to the AFI members regarding their national financial inclusion strategies. In turn, FISPLG provides a platform to important financial inclusion components such as e.g., Gender, Inclusive Green Finance or Digital Financial Services. In the next couple of days you can look forward to the launch of several new knowledge products with a focus on these topics supported by country case studies presented by AFI members.
It’s important to mention that the working group meeting this week also marks the 10th anniversary of FISPLG which was founded by a handful of members in 2012 and has grown to a large group of 58 member institutions from 53 countries, producing a total of 24 Knowledge Products, and effectuating 97 policy changes. Over a time span of 10 years FISPLG has been instrumental in propagating the usefulness of a National Financial Inclusion Strategy which has resulted in, to this date, 63 AFI members with a NFIS, representing 85% of all countries with an NFIS. The new Special Report on the Current State of National Financial Inclusion Strategies (2022) will be revealing trends and lessons learned in this regard, especially regarding countries which launched their NFIS after 2018.
On the other hand, the Inclusive Green Finance (IGF) Working Group is a policy area pioneered by AFI member institutions implementing policies, regulations and national strategies focused on mitigating or building resilience to climate change.
This WG which had 19 members at inception three years ago has now tripled to 59 members from 53 member countries. The rapid evolution of this WG is not only perceived in the number of members but also in the number of policy changes that members have implemented. While it is the youngest of the WGs, it has certainly also shown itself to be very dynamic and agile.
The IGFWG members have developed more than ten KPs in its short existence positioning the AFI 4P Framework as a key element to be considered in the development of NFIS or other financial sector strategies to foster a sustainable financial sector. They also reported eleven policy changes and today, we will be the witnesses to one of these significant policy changes. Our co-host, SEPS, will officially launch the Environmental and Social Risk Management (ESRM) Guidelines today. This project was successfully completed with support from AFI through its In-Country Implementation Program. 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.
Today, we also have a technical session planned with Cesar Augusto Villanueva from Bangko Sentral ng Pilipinas who will highlight the Role of Regulators in Strengthening Climate Adaptation and Building Climate Resilience. We are looking forward to hear more about BSP’s ESRM Guidelines as well as BSP’s recently launched NFIS which is a blueprint for growth & financial resilience.
Increasingly, members also embedded elements of IGF across policies and regulations they developed and implemented. For example, Bangladesh Bank, Bangko Sentral ng Pilipinas, Central Bank of the Solomon Islands, and Banco Central de São Tomé e Príncipe have incorporated elements of IGF in their recent National Financial Inclusion Strategies. Additionally, the Reserve Bank of Fiji completed its financial services national demand-side survey which included elements of gender inclusion and resilience to climate change and very recently has launched its 3rd NFIS which will run over a period of 8 years (2022-2030)
In terms of other related financial sector policies aside from ESRM policies, we see growing policy issuances and interest in related themes that include green taxonomy, green and inclusive finance strategy, green credit policies, and approaches to climate risk management.
We are proud to witness these significant developments in this innovative area which not only highlight the important role of financial regulators in supporting an inclusive global climate action but also in aligning with the 2030 Sustainable Development Goals.
I would like to thank everyone for taking their time to attend this meeting. It is exciting and pleasing to see over 70 members of the FISPLG and IGFWG working groups here today. Allow me to commend all members of the FISPLG and IGF working group for demonstrating content leadership by contributing to the development of knowledge products and participating in peer learning/ knowledge exchange programs. It is thanks to you that we have achieved all the positive results and achievements despite the challenges posed by the lockdowns and travel restrictions.
It is indeed an opportune time to be hosted by SEPS for a convergence of the Financial Inclusion Peer Learning Group and the Inclusive Green Finance Working Group. The impact of COVID-19 on financial inclusion provided us with an opportunity to examine how established financial inclusion practices have performed under crisis circumstances. Even though the pandemic is not yet over, pausing to take stock of emerging lessons and policy priorities will improve our preparedness for future crises. Let us continue to harness the gains from our financial inclusion efforts and position the network towards building more sustainable and resilient financial systems without leaving anyone behind.
I wish to end by thanking you for your participation and thanking Margarita Hernández and supporting SEPS team and my AFI colleagues for organizing this joint working group meeting. I wish you all a fruitful and positive deliberations and wish you all a successful week.