IGFWG Technical Webinar Strengthening resilience & innovative solutions for rural populations – Opening Remarks by Dr. Alfred Hannig, Executive Director, AFI

Ladies and gentlemen,

Good morning. Good afternoon. Good evening. Welcome to the forth Inclusive Green Finance Working Group Technical Webinar: “Strengthening resilience & Innovative solutions for rural populations”.

Thank you to each and every one of you for being here with us today amidst this on-going COVID-19 crisis. The AFI Management Unit appreciates and recognizes the members efforts in joining this webinar, this speaks much about the members’ commitment despite the challenging circumstances.

We are pleased to be able to welcome those of you that have been with us since AFI established the Inclusive Green Finance Working Group (IGFWG) during the AFI Global Policy Forum in Kigali, Rwanda as well as those of you who are new to the Working Group. The AFI Management Unit is very happy and excited to see how fast this WG continues to grow which initially started with 20 members and has since September doubled to 40 members from 37 countries.

This on-going global COVID-19 emergency is again a reminder of how important the role of regulators and policymakers is to ensure that the most vulnerable populations have the tools needed to build resilience to shocks like this one, or to the effects of climate change. You more than ever before looked to to provide policy leadership in developing sustainable policies, such as regulation enabling micro-loans for reducing the vulnerability of small agricultural producers to climate change and solutions for insurance policy management in remote areas to unbanked farmers. These two topics that we will discuss today are some examples, and you have many more to share.

As you are witness in your own countries, the increasing intensity of climate change is altering rainfall patterns, reducing groundwater reserves and producing frequent droughts and floods. The intense rains, combined with agricultural processes, deforestation and overgrazing, exacerbates soil erosion, resulting in less fertile land. Thus, climatic phenomena combined with processes of environmental degradation weakens essential ecosystems services for agricultural activities, undermining the livelihoods of smallholder farmers. In this light, understanding and acquiring initiatives for improving productive practices, increasing income and protecting ecosystems is crucial, since agriculture contributes a significant portion of GDP in many countries globally. The first speaker today, Microfinance for Ecosystem-Based Adaptation, will share some practical examples and insights on this topic.

Likewise, regulators and policymakers are increasingly working with industry participants from a wide variety of backgrounds to develop appropriate FinTech policy and regulatory approaches. It is crucial to balance opportunities and risks and where possible build systems and financial infrastructures that not only perform better from the standpoint of market participants but also from the standpoint of major regulatory and policy objectives. Enhancing public-private dialogue (PPD) between regulators and industry participants can strengthen their mutual understanding of FinTech innovation and risk profiles, the role of technological innovation in financial inclusion, and contribute towards defining global standards in areas such as cybersecurity and data privacy.

In 2019, AFI launched its first Showcase for FinTech innovators with the goal to advance the dialogue between innovators and regulators. Ten finalists were selected. They presented and pitched their solutions in a plenary session (“Reaching the Last Mile: Solutions from the AFI FinTech Showcase”) at AFI’s annual Global Policy Forum, held in Kigali, Rwanda in September last year. The winner of this FinTech Showcase was OKO Crop Assurance. OKO Crop Assurance is the second speaker for today’s webinar.

OKO provides crop insurance to smallholder farmers using satellite imagery and weather forecasting to simplify and automate claim management. It connects to mobile payment platforms, weather information providers and distribution tools, allowing farmers to be compensated instantly when specific thresholds are reached, such as insufficient rainfall or extreme temperatures.

The purpose of this IGFWG Webinar session is to present both initiatives and better understand the impact of climate change particularly in rural areas and learn from these two solutions how those impacts could be addressed.

Ladies and gentlemen,

The COVID-19 pandemic and the efforts to try to stop the spread of the virus, has ironically been resulting in lower levels of greenhouse gases in the atmosphere and reduced material consumption. These reductions are not projected to be sustained, and this momentary reduction does not change the effects of climate change already being felt today. There is also a risk that when the economy recovers from the global crisis, there is an increase in greenhouse gases and other harmful emissions.

This crisis shines a light on and stresses the importance of building resilience for future crisis and risks, such as climate change. This can be achieved by investing in a low-carbon economy and investing in the wellbeing and resilience of those that are the most vulnerable. Intensified efforts to advance financial inclusion, as well as green investments, are a crucial pillar of this resilience building.

For those at the base of the economic pyramid, there are savings and benefits to be gained through a green recovery. This relates to climate-smart agriculture, energy efficiency products and renewable energy sources, but also job creation and investments into resilience building, both socioeconomically and with relation to infrastructure.

This webinar contributes to continue informing and empowering you, financial policymakers and regulators, to increase access and usage of quality financial services for the underserved through formulation, implementation and global advocacy of sustainable inclusive policies.