Luxembourg Pledges €400k Per Year to Consultative Group to Assist the Poor

On Wednesday 5 October 2022, Luxembourg's Minister for Development Cooperation and Humanitarian Affairs, Franz Fayot, and the Minister of Finance, Yuriko Backes, signed a new agreement with the Consultative Group to Assist the Poor (CGAP).

Considering the shared objectives and the close and long-term ties that bind Luxembourg and CGAP, Ministers Franz Fayot and Yuriko Backes met with Sophie Sirtaine, CEO of CGAP, on Wednesday to sign an amendment to the sixth administrative agreement with the group, for a temporary two-year extension.

As part of this amendment, the Luxembourg Government will contribute €400,000 annually to the work of CGAP. €250,000 will come from the Ministry of Foreign and European Affairs and €150,000 from the Ministry of Finance.

CGAP is a platform for exchange and research whose mission is to improve the lives of the poor by promoting innovative solutions in inclusive finance. With the signing of this amendment, Luxembourg will continue to support the implementation of the sixth CGAP strategic plan. This strategic plan aims to advance sustainable financial inclusion and ensure that the poorest, especially women, can seize new economic opportunities and build their resilience through inclusive financial services. It aims to help address major global challenges such as inequality and climate change. Luxembourg will continue to actively participate in the development of a new strategy for CGAP, in collaboration with the inclusive finance actors present in Luxembourg.

Since the creation of CGAP, Luxembourg has been one of its main donors. The first administrative agreement dates from March 1999. As is the case with other partners in the inclusive finance sector, it involves joint support from the Ministry of Foreign Affairs and European Affairs and the Ministry of Finance.

After signing this agreement, Minister Fayot noted: "Thanks to its collaboration with Luxembourg, CGAP has been able to develop a multitude of innovative solutions in the field of inclusive finance over the past years. By signing this two-year extension, we reaffirm our commitment to promote financial inclusion for disadvantaged people, especially women, who are disproportionately excluded from using and accessing financial services".

Finance Minister Backes added: "By not seriously addressing the gender gap and actively encouraging women and girls in developing countries to become more empowered, we risk aggravating existing injustices and inequalities. We also run the risk of missing a major economic opportunity. Inclusive finance is one of the powerful tools we have to help close this gender gap and to actively contribute to more sustainable economic development and growth. It is in this context that I welcome the long-standing collaboration with CGAP".