INCLUSIVE AND INNOVATIVE FINANCE

Lever­ag­ing new finan­cial tools, inno­v­a­tive financ­ing is a diver­si­fied set of finan­cial solu­tions and mech­a­nisms that cre­ate effec­tive ways to chan­nel both pri­vate mon­ey from finan­cial mar­kets and pub­lic resources to solv­ing devel­op­ment problems.

In 2023, the Direc­torate for Devel­op­ment Coop­er­a­tion and Human­i­tar­i­an Affairs sig­nif­i­cant­ly expand­ed its activ­i­ties in the cap­i­tal mar­kets with the sign­ing of a mem­o­ran­dum of under­stand­ing with the Lux­em­bourg Stock Exchange, with the aim of facil­i­tat­ing the devel­op­ment of inclu­sive and inno­v­a­tive finance activ­i­ties in the con­text of devel­op­ment coop­er­a­tion. This mem­o­ran­dum of under­stand­ing fol­lows the co-financ­ing of a tech­ni­cal assis­tance pro­gramme for bond issues of the Glob­al Green Growth Insti­tute (GGGI) in con­junc­tion with the Min­istry of the Envi­ron­ment, Cli­mate and Bio­di­ver­si­ty and the Min­istry of Finance.

In 2023, Luxembourg’s Devel­op­ment Coop­er­a­tion also con­tin­ued its sup­port to var­i­ous play­ers active in inclu­sive and inno­v­a­tive finance.

A new three-year agree­ment has been signed with the Alliance for Finan­cial Inclu­sion (AFI), a glob­al net­work of around 100 finan­cial sec­tor reg­u­la­tors, whose Euro­pean sec­re­tari­at is based in Luxembourg.

In part­ner­ship with the Min­istry of Finance, Luxembourg’s Devel­op­ment Coop­er­a­tion has renewed its com­mit­ment to the Finan­cial Inclu­sion Fund (FIF) with the Euro­pean Invest­ment Bank (EIB). This mul­ti-donor fund sup­ports African micro­fi­nance insti­tu­tions (MFIs) to tai­lor their ser­vices to the needs of their cus­tomers, par­tic­u­lar­ly young entre­pre­neurs, and to mobilise the resources need­ed to refi­nance the sector.

The year 2023 also fea­tured the Euro­pean Micro­fi­nance Week, an annu­al fix­ture for experts in the sec­tor, which took place from 15 to 17 Novem­ber 2023. It was organ­ised by the Euro­pean Micro­fi­nance Plat­form (e‑MFP) and the Inclu­sive Finance Net­work Lux­em­bourg ASBL (InFiNe​.lu), with the sup­port of the Direc­torate for Devel­op­ment Coop­er­a­tion and Human­i­tar­i­an Affairs. On 16 Novem­ber 2023, at a cer­e­mo­ny chaired by H.R.H. the Grand Duchess at the EIB, the Euro­pean Micro­fi­nance Award was pre­sent­ed to Yikri, an MFI in Burk­i­na Faso, in recog­ni­tion of its efforts in the field of finan­cial inclu­sion for food secu­ri­ty and nutrition.

Anoth­er flag­ship event was the African Micro­fi­nance Week (SAM), organ­ised by the NGOADA joint­ly with the Direc­torate for Devel­op­ment Coop­er­a­tion and Human­i­tar­i­an Affairs and the Togolese Gov­ern­ment in Lomé from 16 to 20 Octo­ber, with more than 1,000 par­tic­i­pants. The theme of this sixth edi­tion was inclu­sive and sus­tain­able finance. For exam­ple, the con­fer­ence focused on the role that inclu­sive finance can play not only in reduc­ing risks and vul­ner­a­bil­i­ties, but also in sup­port­ing the tran­si­tion to a green econ­o­my that is resilient to cli­mate change.