Dr. Alfred Hannig, Executive Director of the Alliance for Financial Inclusion (AFI),
Chairs and Members of the AFI Working Groups,
Executive Directors of NRB,
Organizing team from AFI and Nepal Rastra Bank
It is a great pleasure for me to be in front of you all and I would like to express my appreciation for making such generous efforts to make these meetings happen here in Kathmandu. And, my sincere gratitude to the AFI for providing me this opportunity to share my thoughts in this grand gathering of policymakers and regulators from more than 40 countries across the globe.
First, let me start by thanking AFI for its contribution to advance financial inclusion through policy advocacy and empowerment. We have been much benefited from its support in designing and implementing high impact solution to address our unique challenges. The peer learning and knowledge exchange opportunities being provided by AFI have helped us in choosing better solutions and achieving tangible results.
I would like to share my thoughts on two things today that I feel important at present. First, I will briefly touch upon the challenges we are facing today and the emergent priorities. Second, I will highlight Nepal’s recent initiatives in the area of green finance and SME financing.
The world economy is expected to remain stressed in 2023 with high inflation and sluggish growth in most regions. The post-COVID repercussions, emerging geo-political tensions, food and energy crises and climate change, among others, are expected to pose further risks and challenges to policymakers in managing macroeconomic stability as well as ensuring sustained and inclusive growth.
On this line, financial inclusion and climate change mitigation is one of the most pressing issues. While addressing the macroeconomic as well as political issues, we need to move to a resilient and environmentally sustainable economy. And there arises the need of inclusive green finance.
We all are quite aware about the implications of the risk posed by climate change on social inclusion, economic prosperity and financial stability. In addition, the emerging and developing economies are more vulnerable to the impacts of climate change because of their geography, demographic pressures, and limited resources to invest in adaptation and mitigation measures. In such a situation, we have to be more proactive to make the journey to inclusive and sustainable society a real success.
Initiatives for Green and SME Financing
Talking about Green and SME Financing, in case of Nepal, a number of policy initiatives have been taken to expand the access to financial services and promoting green finance.
The next and equally important area for us to focus is ensuring the access of the MSMEs to financial services. MSMEs in Nepal play a significant role being a major source of employment and major contributor to GDP.
To further enhance the sustainable financing, making it more inclusive and greener; NRB has taken initiative to develop Green Taxonomy. It’s my pleasure, to share with you all that for this initiative, AFI is supporting us under In-Country Implementation Project with grant and technical support. We feel honored to have this support from AFI.
Our initiatives are on the right track but we need to do a lot more. Ultimately, the transition to a green economy is not just a matter of economics or finance – it is a matter of survival. Hence, we must all work together to harness its power and build a more sustainable future for ourselves and for generations to come.
For this, we need to further encourage central banks and regulators to adopt robust environmental and social risk management frameworks and a more effective inclusion strategy. This can be done through green macro-prudential and green microprudential policy orientation, a more rational credit allocation strategy and providing further incentives to the market for green and SME investments.
Let me conclude by reiterating that we are passing through hard times and have a lot of policy priorities to ensure macroeconomic stability and build inclusive and sustainable society. Ensuring finance to promote green economy and SMEs is one of those priorities. I believe that international cooperation and exchange of ideas through the platforms like AFI would be of great help in our journey going forward.
I hope that learning from each other’s experience in these meetings would provide a great leverage for advancing green financial inclusion and promote the SMEs.
Let me stop here and wish all of you a very productive and fruitful discussion for the next three days. I wish, you have a pleasant stay in Kathmandu.
Thank you for your attention