Good morning and a warm welcome to Maldives. This is AFI’s last capacity building event of 2023 and what better way to end the year than with an event in the breathtaking island state of the Maldives.
We sincerely thank Governor Ali Hashim and the team from Maldives Monetary Authority, for co-hosting this event where we look forward to progressive discussions on Inclusive Green Finance. Climate change is a global challenge that is having devastating effects across the globe, but more so for the vulnerable people at the bottom of the pyramid, with whom the AFI network is committed to work. As financial inclusion policymakers, we have a significant role to play in addressing this challenge through facilitating access to financial services for mitigation and resilience building. And we appreciate the presence of all here, who by joining us today, have demonstrated your commitment in that direction.
I wish to acknowledge our co-host, MMA who have been an active member of AFI since 2010 and is also a member of AFI’s recently launched South Asia Region Financial Inclusion Initiative (SARFII). MMA actively contributed in developing the agenda for SARFII and is providing leadership to the initiative as the Chair for SARFII for the term 2022-2024. MMA is a member of the seven AFI Working Groups and a recipient of AFI’s In-Country Implementation (ICI) grant to develop its National Financial Inclusion Strategy, scheduled to be launched in 2023. Digital financial services with focus on payments, sustainable and Inclusive Green Finance and consumer protection and financial education and literacy are the key focus areas for MMA.
Environmental degradation, climate change, and the associated consequences are increasingly becoming high priority policy areas as governments across the globe grapple with its devastating effects on mankind. Many of the countries in the AFI network have experienced the impact of climate change in one form or other – be it the record-breaking heatwaves experienced in many parts of the globe, or the monsoon flooding which recently left about a third of Pakistan under water, affecting an estimated 33 million people or the extreme wildfires in North and South America claiming lives while destroying livestock and acres of forest land. In all these episodes of climate extremes, there is a notably disproportionate negative impact on vulnerable segments of the population, particularly women, children and smallholder farmers.
Among the many initiatives being implemented across the globe to manage the threat of climate risk, access to finance has been identified as being key to mitigating the risk and building resilience amongst vulnerable segments of the population. Conversations within the AFI network on the interlinkages between climate risk and financial inclusion began in earnest in 2015 and since then AFI members have been at the forefront of global developments on Inclusive Green Finance. The Sharm El Sheikh Accord on Financial Inclusion, Climate Change and Green Finance was adopted in 2017 at the 9th Global Policy Forum in Egypt and we saw AFI formally adopt Inclusive Green Finance as a policy area. To record the ongoing changes and progress made in accordance, the Sharm El Sheikh Accord was updated and the adopted in the September 2022 Global Policy Forum held in Rwanda, marking renewed commitment and action by members on this topic.
By adopting the Accord, the AFI network recognized the need to contribute to an inclusive, prosperous and environmentally sound future by designing and implementing financial inclusion policies and regulatory reforms aligned to the 2030 Agenda for Sustainable Development and the Paris Agreement on climate change. One of the notable outputs from the Inclusive Green Finance Working Group was the identification of four policy categories namely Prevention, Promotion, Protection and Provision under the 4Ps Policy Framework. Awareness of Inclusive Green Finance has since grown across the network with 13 Member institutions making Maya Declaration Commitments relating to Inclusive Green Finance and more incorporating Inclusive Green Finance into their National Financial Inclusion Strategies.
For the first time, AFI participated in COP27 held in Egypt earlier this month and also hosted a side event ‘How central banks are promoting financial inclusion for climate resilience and mitigation’ at COP27. The objective was to highlight the critical role of financial regulators in contributing to climate action. The Roadmap to Inclusive Green Finance, co-written between the IGFWG and the University of Luxembourg, was also launched. The positive engagement of the delegation of AFI members in COP27 offered a good opportunity for all to better understand the work done by the AFI network, specifically on inclusive green finance.
I wish to recognize some of the work undertaken in Maldives relating to climate risk. As an island state, Maldives faces threat from rising sea levels and destruction of coral reefs as sea water temperatures rise due to climate change. The Ministry of Environment, Climate Change and Technology has led the country’s response to climate change in collaboration with stakeholders and partners such as the UN Green Climate Fund. Our co-host, MMA have also set a target under the Maya Declaration framework to formulate a National Sustainable Finance Roadmap by the end of 2024, as part in support of the country’s response to the threats posed by climate change.
Tackling climate change requires collaboration among numerous stakeholders and to this end, AFI held a one-day in-country workshop for the MMA team and local stakeholders in Maldives, including the President’s Office, Ministry of Environment, Climate Change and Technology, Ministry of Finance, Ministry of Tourism, Capital Market Development Authority. The Workshop established the important role of these diverse stakeholders in advancing Inclusive Green Finance and set the stage for collaboration among the stakeholders as MMA develops and implements the relevant Inclusive Green Finance policies to complement the work being led by the Ministry of Environment.
The road to a just transition to a greener economy is a long one and as a network of financial sector policymakers, we have a huge role to play in greening our economies. This training program seeks to take the discussion on Inclusive Green Finance a step forward from raising awareness to concrete actions aimed at climate adaptation and resistance building. The agenda of this training will focus on concrete tools and insights for Inclusive Green Finance policy development, to equip you to drive policy development and transformation in your institutions.
During the next four days, participants will explore ways of incorporating Inclusive Green Finance into their respective national financial inclusion strategies. Participants will also assess the role of data and Digital Financial Services in promoting Inclusive Green Finance as well as incorporating gender considerations into green finance policies. The training will also discuss the challenges in financing green initiatives and explore various innovative financing mechanisms that may be considered by policymakers. As with all AFI member trainings, peer learning will drive the learning process through sharing from AFI members that have implemented aspects of Inclusive Green Finance. This will be complemented by expert speakers from AFI private sector and knowledge partners, sharing their experiences in promoting Inclusive Green Finance. It is my hope that participants will take away some lessons from the sessions lined up, to advance Inclusive Green Finance in your jurisdictions.
I want to emphasize that the AFI Management Unit stands ready to support members’ initiatives in all policy areas, including Inclusive Green Finance policy development and implementation. Through our common network, there is a wealth of knowledge and insights that we can all learn from and draw from to advance this policy area that, is becoming increasingly critical for the health of our financial systems and for the inclusion of the most vulnerable populations.
On that note, I take this opportunity to share some exciting news on the forthcoming launch of online courses to complement the existing services offered by our Capacity Building unit. One of the first five online courses to be launched will include a course on Inclusive Green Finance. The course will provide the members with technical understanding of climate risk and green finance, and the role of financial inclusion in tackling the threat of climate change.
As I wrap up, I wish to thank MMA once again for hosting this event and I wish all participants fruitful discussions over the next four days. I want to encourage participants to take full advantage of this in-person training to network with other colleagues and to enjoy the beauty of Maldives.