Inclusive Green Finance Working Group (IGFWG) - Alliance for Financial Inclusion

A platform for financial regulators and policymakers to provide policy leadership and regulatory guidance related to inclusive green finance.

Launched in 2019 in Kigali-Rwanda, IGFWG is working to develop green financial inclusion policy solutions while focusing on the communities most vulnerable to climate change. In response to the increasing interest from the AFI network, member institutions committed to work together and collaborate with partners in identifying, understanding and implementing inclusive green finance policy solutions.

AFI’s inclusive green finance workstream is part of the International Climate Initiative (IKI), supported by the German Federal Ministry for Economic Affairs and Climate Action (BMWK), based on a decision by the German Bundestag.

Member
Institutions

Countries

Policy changes

Knowledge products

Chairs & Focal points

Chair

Kabinda Kawesha, Bank of Zambia

Co-Chair I

Sameh Sawafta, Palestine Monetary Authority

Co-Chair II

Jorge Moncayo, Superintendencia de la Economía Popular y Solidaria de Ecuador

Gender Focal Point

Najwa Mouhaouri, Bank Al-Maghrib

Gender Focal Point Co-Lead

Joe-Jack Bossale, Centrale Banque du Congo

Objectives

Provide policy leadership and regulatory guidance on Inclusive Green Finance (IGF)

Create an enabling environment for IGF amongst its members

Create a common understanding of IGF topics by sharing experiences and building a taxonomy of inclusive Green Finance policies and regulations

Conduct research and analysis of financial sector regulation, policies and strategies that have a positive impact on the adaptation and mitigation of climate change

Stimulate discussion and learning on new developments and good practices on IGF amongst policymakers through the exchange of experiences

Provide a platform for capturing, tracking, and sharing information on innovative IGF products, business models and updated appropriate policy responses; and

Establish linkages and provide inputs, where appropriate, to global networks working in Green Finance and sustainable financial inclusion, seeking to benefit from and contribute to the growing body of knowledge and best practice in this area.

Member Institutions

Banco Nacional de Angola
Bangladesh Bank
Insurance Development and Regulatory Authority Bangladesh
Royal Monetary Authority of Bhutan
Banque de la République du Burundi
National Bank of Cambodia
Superintendencia General de Entidades Financieras de Costa Rica
Ministère de l’Economie et des Finances de la Côte d’Ivoire
Banque Centrale du Congo
Superintendencia de Bancos
Superintendencia de la Economía Popular y Solidaria de Ecuador
Central Bank of Egypt
Banco Central del Paraguay
Bank of Namibia
Bank of Zambia
Banque Centrale de Tunisie
Banque de la République d’Haiti
Banco Central de Reserva de El Salvador
Ministry of Finance Eswatini
Reserve Bank of Fiji
Bank of Ghana
Banque Centrale de la République de Guinée
Central Bank of Jordan
Retirement Benefits Authority of Kenya
SACCO Societies Regulatory Authority (SASRA) Kenya
Central Bank of Liberia
Reserve Bank of Malawi
Bank Negara Malaysia
Maldives Monetary Authority
Comisión Nacional Bancaria y de Valores (CNBV)
Central Bank of Armenia
Central Bank of Eswatini
Central Bank of Nigeria
Central Bank of Sudan
Central Bank of the Republic of Uzbekistan
Financial Regulatory Commission of Mongolia
Bank Al-Maghrib
Banco de Moçambique
Nepal Rastra Bank
Palestine Monetary Authority
Bank of Papua New Guinea
Bangko Sentral ng Pilipinas
Central Bank of Samoa
Banco Central de São Tomé e Príncipe
Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO)
Bank of Sierra Leone
Central Bank of Sri Lanka
Centrale Bank van Suriname
National Bank of Tajikistan
Bank of Tanzania
Central Bank of The Gambia
Banco Central de Timor-Leste
National Reserve Bank of Tonga
National Bank of Rwanda
Bank of Uganda
Ministry of Finance and National Planning Zambia
Microcredit Regulatory Authority of Bangladesh
Reserve Bank of Zimbabwe

Subgroups & Planned Activities

Green Credit Risk Guarantees (with SMEFWG):

During the 3rd IGFWG Meeting, members decided to generate guidance on how to adapt the Credit Risk Guarantees for projects, businesses or initiatives that build resilience to climate-related risks or mitigate the climate change causes with special focus on the role of regulator as the main guarantor of loan losses or as an enabler for such protection policies.

Credit risk guarantees are one of the many potential de-risking instruments to help accelerate green lending support from central banks and build vulnerable population’s resilience to climate change. The implementation of this risk financing framework by central banks will leverage banking loans for low carbon solutions and green projects which otherwise would not have been able to receive financing from the private sector. They will also help to share credit risks stemming from climate change between the private and public sectors.

Planned deliverable: Special Report on to green the Credit Risk Guarantees.

Leveraging DFS in advancing IGF initiatives:

Across AFI member institutions, the interest of the potential intersections between digital financial services and inclusive green finance is growing more and more. The relevance of this topic increased after COVID-19 pandemic outbreak. This particular event has shown that digital channels can be used a a powerful tool to reach the most vulnerable sectors. Nevertheless, it has not yet been a DFS-related green finance initiative in place and therefore no experiences from AFI members to share. This knowledge product will aim to come up with a reference material that identifies interstices and explores opportunities to integrate digital finance and inclusive green finance. Ultimately, the paper aims to provide guidance for policymakers and financial regulators on policy approaches to leverage digital finance in advancing inclusive green finance.

Planned deliverable: Guideline Note on how to leverage DFS in advancing IGF.

IGF Data:

Only a few financial regulators are collecting and sharing information on inclusive green finance for specific purposes. Disaggregated data collection on green finance activities is, in general, still lacking. Nevertheless, more and more countries are interested in embarking on the path of green data collection.

Planned deliverable: Special Report on IGF Data.

Climate Change, Sustainable Finance and Financial Stability (with GSPWG):

There is a clear recognition from financial regulators that climate change deepens poverty, hits the most vulnerable hardest and that climate change would be a real financial risk, especially in the countries where AFI members are. This subgroup aims guiding members on key issues in climate risk and financial stability.

Planned deliverable: Guideline Note on what regulatory and supervisory actions which respond to the risks of climate change to the financial sector.s from financial capability and consumer protection.

Maya Declarations

Primary thematic area

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Consumer Empowerment  and Market Conduct

Consumer Protection

Financial Literacy and Financial Education

Maya Declaration targets

Completed

In progress

Completion rate

55%

52%

54%

53%

48%

49%

40,1%

38%

39%

44%

46,5%

Primary thematic area

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Consumer Empowerment  and Market Conduct

Consumer Protection

Financial Literacy and Financial Education

Maya Declaration targets

Completed

In progress

Completion rate

55%

52%

54%

53%

48%

49%

40,1%

38%

39%

44%

46,5%

IGFWG & Gender

Small, women-led businesses are engines of innovation and bring with them understanding of local markets, land, skills, and networks needed to overcome practical growth challenges. However, they face a host of obstacles in low- and middle-income countries, from missing market functions to technical capacity. Access to capital is a key barrier that constrains the growth of most green and women-owned businesses, especially women-led MSMEs.

Women-led small businesses also:

work in sectors with significant climatic exposure, often restricted to marginal and degraded agricultural lands that are prone to flooding

struggle to access capital and technology, and suffer from gender-blind policies and restrictive sociocultural norms

must juggle business and household responsibilities, meaning they must manage risks at both levels when disaster strikes

IGF policies should take the unique circumstances of women-led businesses into account by developing gender-responsive policies that address their needs, encourage innovation, increase employment, build climate resilience, and promote financial stability.

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