Luxembourg to Contribute €1.2m towards Financial Inclusion in Africa

On Friday 6 September 2019, the Luxembourg Ministry of Finance signed a letter of understanding (LOU) with the Alliance for Financial Inclusion (AFI) to launch a new multi-donor collaboration framework to help bolster financial inclusion across the African continent.

Through the newly created Multi-Donor Financial Inclusion Policy Implementation Facility (MD-PIF), the AFI and Luxembourg will help develop and implement policies that foster financial inclusion with a focus on gender equality, including digital financial innovation and FinTech, Financial Education and SME Finance. The framework aims to contribute to the development of an innovative, sustainable and competitive financial sector in Africa at both national and regional levels.

Luxembourg's Minister of Finance, Pierre Gramegna, was the first MD-PIF partner to sign the multilateral LOU, together with AFI Executive Director Dr. Alfred Hannig. Alongside Luxembourg, the Development Agency of France (AFD) and Germany's Ministry of Economic Cooperation and Development (BMZ) are also participating in this new framework. The cooperation is rooted in the three partner's support toward the advancement of the Sustainable Development Goals (SDGs), particularly on poverty alleviation, gender equality and climate action respectively.

For its part, Luxembourg will make a total of €1.2 million available to the MD-PIF (to be paid in three yearly tranches of €400,000 each). In addition, AFI members will benefit from the insight and engagement of many government-supported institutions in the Grand Duchy, from academia to FinTech and microfinance ecosystems, as well as private actors of the country's leading financial centre.

Minister Gramegna commented: "The launch of this new multi-donor collaboration framework underlines Luxembourg's commitment to join forces with like-minded partners in the promotion of economic, social and environmental sustainability. By providing technical and financial assistance through this new framework, Luxembourg will help develop the necessary regulatory frameworks and supportive infrastructure to foster financial inclusion across Africa".

MD-PIF's initial phase is expected to run for three years (2019-2021). Among its key features is to support in-country policy implementation activities, create synergies with the partners and investees of the MD-PIF funders and to provide cost-effective donor engagement opportunities that generate strong development outcomes.

Signatories from Germany and France are expected at next week's 2019 AFI Global Policy Forum (GPF), AFI's flagship event and the world's biggest forum for financial inclusion policymakers, which will be held in Rwanda this year.