The Government of Luxembourg Extends Cooperation Agreement with the Alliance for Financial Inclusion 

The Luxembourg Ministry of Finance and the Directorate for Development Cooperation and Humanitarian Affairs of the Ministry of Foreign and European Affairs have signed the second phase of their agreement with the Alliance for Financial Inclusion’s (AFI) European Representative Office (ERO) at a ceremony in the country’s capital this week. The signing will unlock additional support from the Government of Luxembourg to advance inclusive and sustainable policies and regulations in Eastern Europe, Central Asia, the Middle East, and North Africa. The ceremony was hosted at the Luxembourg House of Startups (HoST) and House of Financial Technology (LHoFT) and attended by Luxembourg’s Minister for Development Cooperation and Humanitarian Affairs, Franz Fayot, Minister of Finance, Yuriko Backes, AFI’s Executive Director, Dr. Alfred Hannig, and LHoFT CEO, Nasir Zubairi, with AFI’s Global Partnerships and Europe Director, Ilya Sverdlov serving as moderator of the event.

“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 Minister 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 policymaking and regulatory authorities in the AFI network and partners across Luxembourg’s inclusive finance ecosystem, as well the broader European stakeholder community and global financial standard setting bodies (SSBs).

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).  

“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 Minister Backes.

Since the launch of the AFI ERO in Luxembourg in October 2020, the Government of Luxembourg has proved a valuable partner and host, as the country’s reputable financial inclusion ecosystem helped fill important regulatory knowledge gaps while creating opportunities for insight exchange on converging policy priorities. Among these is a shared interest in advancing Inclusive FinTech, an area where partners such as LHoFT have provided significant value and expertise, while also benefitting from co-learning with AFI. 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. Partnerships such as these, and others in which the ERO plans to engage in the coming years, offer important opportunities for AFI and the Government of Luxembourg to scale financial inclusion. 

“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 opportunities for mutual exchange and learning with the rest of the world”, stressed AFI Executive Director, Dr. 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 841 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.

About Luxembourg Ministry of Finance
The Luxembourg Ministry of Finance prepares and implements the budgetary, financial and tax policy of the State. In this capacity, the Ministry is also responsible for the public finances and the preparation of the budget. In addition, it defines the policy with regard to the financial sector, and is responsible for external relations with the various international financial institutions.

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 SDGs. 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 member institutions including central banks, ministries of finance, and other financial regulators from 75 developing and emerging economies. AFI seeks to empower policymakers to increase access and usage of quality financial services for the underserved through formulation, implementation, and global advocacy of sustainable and inclusive financial policies.

AFI’s Europe Representative Office, co-hosted with the support of Luxembourg’s Ministries of Finance and Foreign and European Affairs since 2020, is centered on advancing several key pillars of AFI’s financial inclusion framework, including providing policy and regulatory support to AFI members in Eastern Europe, Central Asia, and the Arab Region; coordinating strategic partnerships with funders, donors and private sector players; engaging with global financial Standard Setting Bodies; and facilitating peer learning between members and partners within the European policymaking community.