On 27 March 2023, Franz Fayot, Minister for Development Cooperation and Humanitarian Affairs, and Yuriko Backes, Minister of Finance, signed with Alfred Hannig, Executive Director of the Alliance for Financial Inclusion (AFI), the extension of the cooperation agreement with the European Representative Office (ERO) of AFI during an official ceremony at the Luxembourg House of Financial Technology (LHoFT). With the launching of phase two of the agreement, the Directorate for Development Cooperation and Humanitarian Affairs of the Ministry of Foreign and European Affairs and the Ministry of Finance will provide additional support to AFI to advance inclusive and sustainable policies and regulations in Eastern Europe, Central Asia, the Middle East and North Africa.
"The Luxembourg Development Cooperation firmly believes that financial inclusion can play a crucial role and can have a catalytic effect on equitable and sustainable development. Providing new opportunities for the financially excluded helps people improve their daily lives and thus builds economies that are more resilient. This ambition lies at the heart of our work and is an integral part of our effort to 'leave no one behind”, highlighted Franz Fayot in his opening remarks.
The partnership between the Government of Luxembourg and AFI will also support the expansion of technical cooperation and knowledge exchange between the policy and regulatory authorities of the AFI network and partners in the Luxembourg inclusive finance ecosystem, as well as the broader European stakeholder community and global financial standard setting bodies (SSBs).
"With this new support, AFI will be able to continue to foster likeminded cooperation with policymakers at European and international level in shared areas of priority such as gender-inclusive finance, inclusive green finance, and digital financial services. We live in an increasingly connected world, where international organisations such as AFI and global standard setting bodies are playing an increasingly important role to enhance joint dialogue in the implementation of national strategies. AFI acts as a catalyst for international cooperation on topics that are close to our heart”, reiterated Yuriko Backes.
In parallel, the Ministry of Finance of the Grand Duchy of Luxembourg and AFI have also signed a cooperation agreement to advance financial inclusion of vulnerable groups in Africa and the Arab Region via the second phase of AFI's Multi-Donor Financial Inclusion Policy Implementation Facility (MD-PIF).
Since the launch of AFI ERO in Luxembourg in October 2020, the partnership between Luxembourg and AFI has helped to fill important regulatory knowledge gaps while creating opportunities for insight exchange on converging policy priorities. In the period ahead, the ERO will also incorporate a focus on Inclusive Green Finance (IGF), a policy area that AFI has championed. In November 2022, AFI - in partnership with the University of Luxembourg's ADA Chair in Financial Regulation (Inclusive Finance) - presented the AFI IGF Roadmap at COP-27 in Sharm El Sheikh, Egypt.
"This cooperation between Luxembourg and AFI testifies to the global convergence around financial inclusion in very concrete terms. Financial inclusion is not just a priority for many emerging and developing countries. Developed nations, like Luxembourg, recognize its relevance, especially in maintaining safe and sound financial systems and ensuring financial health for everybody. Financial inclusion, sustainable finance, and inclusive green finance are firmly embedded in both AFI and the Luxembourg environment, offering incredible opportunities for mutual exchange and learning with the rest of the world," stressed Alfred Hannig during the signing ceremony.
With the development and implementation of over 900 financial inclusion policies and regulations worldwide, AFI member institutions have granted up to 630 million people access to financial products and services – driving significant change in the lives of the world's poor and unbanked. With a strong emphasis on gender inclusive finance and inclusive green finance, these policies and regulations provide quality digital financial services; strengthen consumer protection and consumer empowerment; improve access to finance for micro, small and medium enterprises (MSMEs); advance financial inclusion data; and support the development and implementation of national financial inclusion strategies.
Released by the ministry of Foreign and European Affairs, the Directorate for Development Cooperation and Humanitarian Affairs and the ministry of Finance