AFI’s Latin America and Caribbean members and the Luxembourg Development Cooperation launch new project to boost financial inclusion

San José, Costa Rica (January 25, 2023) – A known pioneer in global sustainable and inclusive finance, Luxembourg is invariably seeking out international partners with similar ideals. Meanwhile, 5000 miles across the North Atlantic Ocean, the Latin America and Caribbean (LAC) region has witnessed a surge in reputable financial inclusion initiatives with an increased demand for the resources to drive them. At a roundtable meeting in Costa Rica this week, AFI’s Latin America and the Caribbean members, and Luxembourg’s Directorate for Development Cooperation and Humanitarian Affairs, signed into effect a pilot project on the advancement of financial inclusion in the region.

Hosted by Superintendencia General de Entidades Financieras (SUGEF), the closed-door discussion culminated in an insightful exchange between some of AFI’s leading members in the LAC region and Luxembourg’s Minister for Development Cooperation and Humanitarian Affairs, Franz Fayot. In his opening remarks, Fayot highlighted that a crucial aspect of the new project will be “sharing expertise and knowledge between leaders and improving the financial inclusion framework in the LAC region”.

SUGEF representative and Director of the National Council for Supervision of the Financial System (CONASSIF), Silvia Saborío shared her sentiments, adding:

“Access to financial services is crucial to strengthening domestic resource mobilization and thus to social and economic development. Nevertheless, access to finance remains a major challenge in our region. That is why we are welcoming international cooperation and support to strengthen capacities, resources and know-how to local authorities and institutions towards this end”.

SUGEF is currently on its way to developing a policy framework to support a newly designed national Credit Information System. As part of the new project’s tailored in-country support, SUGEF will receive technical assistance in developing and implementing Costa Rica’s first National Financial Inclusion Strategy (NFIS).

The new project will advance regional digital financial services (DFS), inclusive FinTech, national financial inclusion strategies (NFIS) and inclusive green finance (IGF), with an overarching prioritization of gender inclusive finance. Aimed at meeting the targets of the Sustainable Development Goals, the project aligns with Luxembourg’s Development Cooperation Strategy “On the Road to 2030” by contributing to the eradication of extreme poverty and the promotion of economic, social and environmental sustainability through multilateral partnerships.

Practical financial inclusion policy measures will also include increased policy guidance, capacity building, and collaboration between AFI members and European partners in Luxembourg, the LAC region, and beyond, as a means of identifying shared policy priorities in the global north and south. The latter objective already kicked off during the meeting, as AFI’s LAC members shared comprehensive insights with their Luxembourg colleagues on regional successes and challenges to financial inclusion.

“The alliance between AFI and the government of Luxembourg, will incentive the exchange of knowledge and existing cooperation between financial regulators in developing and developed countries… It will allow broader cooperation with the main stakeholders at a European and international level, especially in the field of FinTech, Gender Inclusive Finance and green finance”, highlighted Dr. Margarita Hernández, from Ecuador’s Superintendencia de Economía Popular y Solidaria (SEPS) – a leading member in the AFI network and regional champion of sustainable finance.

AFI in Latin America and the Caribbean is represented by member institutions from 11 countries, including Costa Rica, Ecuador, El Salvador, Haiti, Honduras, Mexico, Paraguay, Peru, Suriname, the Bahamas, and the Dominican Republic. These members play a vital role in AFI’s global governance structure, leading unprecedented financial inclusion initiatives across the region and beyond. In 2016, the Financial Inclusion Initiative for Latin America and the Caribbean (FILAC) was launched as a unique platform for increased peer learning and collaboration among policymakers and regulators in the LAC region. Since its founding, FILAC has promoted innovative, sustainable and gender inclusive growth through the implementation of smart financial inclusion solutions among the most vulnerable.

FILAC Chair and Governor of the Banque de la République d’Haïti, Jean Baden Dubois expressed his vision of the regional initiative as “a strong network of actors” that together strive to “strengthen the protection of financial consumer rights and interests, and enhance the public’s financial literacy and sustainable financial resilience for our fellow citizens”, with the ultimate common goal of reaching “financial well-being of our respective populations, fair economic growth, and sustainable development”.

Currently, FILAC members are developing a regional policy framework to foster DFS for women-led micro, small and medium enterprises (MSMEs). The region has the highest percentage of women leaders in the AFI network and six members have already been recognized as AFI Gender Inclusive Finance Ambassador institutions. The project will thus also aim at further scaling up women’s empowerment in the region through peer-to-peer exchange of tried and tested best practices on gender inclusive finance.

AFI’s Executive Director, Alfred Hannig expressed his excitement about the expanded collaboration, suggesting that the aligned interests of AFI’s LAC members and the Luxembourg government will provide the resources required to boost regional financial inclusion objectives, as well as gain and grow insights from lessons learned on topics of convergence by regulators in the LAC region and stakeholders in Luxembourg’s inclusive and sustainable financial ecosystem.

“LAC members’ proven ability to successfully implement ground-breaking financial inclusion projects, combined with Luxembourg’s expertise in innovative, progressive financial inclusion development, can only be a recipe for success. I deeply appreciate the great efforts by SUGEF, our partner institution in establishing the AFI Regional Office in Latin America and Caribbean region, which is now moving forward”, AFI’s Dr. Hannig underscored.

About Luxembourg’s Directorate for Development Cooperation and Humanitarian Affairs

The Directorate for Development Cooperation and Humanitarian Affairs pursues the main objective to contribute to the eradication of extreme poverty and the promotion of economic, social and environmental sustainability. Its interventions are closely aligned with the Agenda 2030 and aim to promote meaningful progress in achieving the SGDs. Luxembourg’s focus lies on four interrelated thematic priorities: Improving access to quality basic social services, enhancing socio-economic integration of women and youth, promoting inclusive and sustainable growth and strengthening inclusive governance. In all of its activities, the Luxembourg Development Cooperation places a particular emphasis on implementing its three cross-cutting priorities, namely human rights, gender equality and environmental sustainability.

About AFI

AFI is the world’s leading organization on financial inclusion policy and regulation. The global alliance is made up of 83 of member institutions including central banks, ministries of finance and other financial regulators from 75 developing and emerging markets. AFI works on empowering policymakers to increase access and usage of quality financial services for the underserved through formulation, implementation and global advocacy of sustainable and inclusive policies.

AFI’s FILAC comprises 11 AFI member institutions, including financial regulators and policymakers in the Bahamas, Costa Rica, Dominican Republic, Ecuador, El Salvador, Haiti, Honduras, Mexico, Paraguay, Peru and Suriname. Launched in 2016, it aims to be the driving force for advancing financial inclusion in Latin American and Caribbean.

AFI’s Europe Representative Office in Luxembourg, co-hosted with support from the Ministry of Finance and the Ministry of Foreign and European Affairs of the Grand Dutchy of Luxembourg, advances several pillars of AFI’s activity including the provision of services to AFI members in Eastern Europe, Central Asia, and the Arab Region, as well as coordination of strategic technical and funding partnerships, engagement with financial Standard Setting Bodies, and policy peer learning with the European policymaking community.