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The European Microfinance Week (EMW), hosted by the Luxembourg-based European Microfinance Platform (e-MFP), is returning to the Abbaye de Neumünster in Luxembourg-Grund from Wednesday 15 to Friday 17 November 2023.
Over 40 sessions dedicated to different aspects of financial inclusion are on the agenda, with several sessions also available online for those unable to attend in person. Among the highlights is the announcement of the winner of the €100,000 European Microfinance Award 2023 on Thursday 16 November; this year’s award is dedicated to inclusive finance for food security and nutrition.
Ahead of EMW 2023, Chronicle.lu reached out to Christoph Pausch, e-MFP Executive Secretary, to learn more about this upcoming edition, particularly the award theme and green and climate-smart finance. Further details on the EMW 2023 programme are available at https://www.emw2023.eu/.
Chronicle.lu: Last year, EMW returned to its in-person format after two years of virtual editions. What feedback did e-MFP receive for the 2022 edition and did this impact the decision to hold this year's event in person but with several online sessions?
Christoph Pausch: Participants were delighted to meet once again face-to-face as there is no substitute for the rich discussion, opportunities for exchange and new connections made that you can only get in person. However, those who could not travel to Luxembourg really appreciated the opportunity to join us online and (in addition to 360 persons present at the event in Luxembourg) we had over 250 participants mainly from outside Europe who connected virtually.
Chronicle.lu: What influenced the decision to centre the European Microfinance Award 2023 around inclusive finance for food security and nutrition?
Christoph Pausch: After years of progress, we are moving backwards on food security. The number of people suffering from malnutrition, so-called “hidden hunger”, and starvation is increasing. The pandemic, macroeconomic downturns, supply chain issues and especially climate change are all driving this issue. So it was obvious that this challenge, which disproportionately affects the same people who are most likely to be financially excluded and economically precarious, was the right one at the right time for this year’s Award.
Chronicle.lu: In today's geopolitical context, amid numerous crises including food insecurity across Africa, how can inclusive finance empower people in terms of food security and nutrition?
Christoph Pausch: Food and nutrition is obviously outside the core expertise of a financial institution, but the sector can play a wide range of roles here. Food security is much more than just the demand-side needs - i.e. can poor people access and afford food? - and truly straddles what we call the food “system” which extends via retailers, packagers, distributors, farmers, input suppliers and many more. A systemic challenge needs a systemic response, and financial providers can support all these players in the value chain, with insurance, payments, credit, savings and non-financial support like technical assistance in agronomy, [for] example.
Chronicle.lu: In what way has COVID-19 (and/or other global issues) perhaps impacted this situation at the global level?
Christoph Pausch: The pandemic has a legacy which is still significant, despite the public health crisis being, mostly, in the past. Inflation is high almost everywhere, but especially in low-income countries, and inflation is always regressive as well - it hits the poorest in a society the hardest. Russia’s invasion of Ukraine has exacerbated various matters - Ukraine being the “breadbasket” of Europe and a critical grain exporter - but the other biggest effect is climate change. Severe weather events like mega-storms and floods are increasing in prevalence and severity. Drought, erosion and pestilence are all driven by climate change. And all of these obviously negativity affect the availability, reliability and affordability of quality food.
Chronicle.lu: This is a major theme at EMW 2023 (and previous editions) - what is the role of green and climate-smart finance in Luxembourg and more globally? What are some of the major/emerging trends in this area?
Christoph Pausch: The effects of climate change and environmental degradation and their stronger impact on poor and vulnerable populations in developing countries is undeniable, and the advantaged position and role of inclusive finance actors in these countries in the implementation of mitigation of and adaptation to climate change strategies is increasingly recognised.
Green and climate-smart finance is increasingly emerging as the most important topic (as the upcoming e-MFP Financial Inclusion Compass 2023, to be launched at EMW 2023, will show). EMW 2023 will kick off with an opening plenary to recognise (and celebrate) the ten years of e-MFP’s Green and Inclusive Climate-Smart Action Group - and to present the main milestones achieved so far and the evolving challenges in the field. This will be followed by several breakout sessions which will focus on: inclusive green finance and regulation; climate risk products, impact data management tools and the latest taxonomies; the issues of climate change and biodiversity erosion, which call for a deep and quick transition of our economies; the path from climate change risk assessment and mitigation to climate resilience, as well as the business opportunities and chances of success for financial service providers.
Chronicle.lu: Tell us more about e-MFP's Green Inclusive and Climate-Smart Finance Action Group, which is celebrating its tenth anniversary this year - what are some of the key areas on which this group is currently focusing?
Christoph Pausch: The e-MFP Green Inclusive and Climate Smart Finance Action Group (GICSF-AG), established in 2013, is a unique multi-stakeholders think tank that brings together inclusive finance practitioners to raise awareness and understanding of what green inclusive finance is about, to discuss, exchange experiences and find common path in dealing with environmental issues, seize green opportunities and create new practical tools to advance green inclusive and climate smart finance.
In recent years, green inclusive finance has become a major focus for all stakeholders involved in the inclusive finance sector, and while many are taking the first steps in this path, others such as the e-MFP GICSF-AG have been working and raising awareness in this area for more than a decade. Financial service providers, microfinance networks and the various stakeholders in the sector are constantly looking for examples to learn from and to this end, the e-MFP GICSF AG recently launched The Green Map, implemented with the financial support of the Luxembourg Government. The project maps green inclusive finance projects and inclusive finance actors' best practices in both adaptation to and mitigation of climate change and more broadly coping with environmental degradation and promoting sustainable environmental practices.
Chronicle.lu: In what way does e-MFP feel Luxembourg is well-placed to address such global issues?
Christoph Pausch: Luxembourg is a global hub recognised for its important role especially in the inclusive and impact finance sectors. Luxembourg, as a centre for responsible finance, supports the implementation of the Sustainable Development Goals (SDGs) and is well-placed to contribute to international development through its role as a hub for sustainable finance and, as such, as a leading place for inclusive and impact finance. Today, the majority of microfinance investment vehicles (MIVs) are based in Luxembourg, representing over 60% of the sector's assets under management worldwide.
Luxembourg has established itself as an important international player in inclusive and innovative finance and continues to contribute to efforts to improve regulation, transparency and client protection in this sector. Luxembourg is constantly expanding its toolbox of products and services designed to promote investment into green and sustainable projects and to help bring sustainable finance into mainstream. e-MFP, supported by the Luxembourg Ministry of Foreign and European Affairs [...] and the Ministry of Finance, is proud to play a key role in the important financial inclusion ecosystem of Luxembourg helping to address current global challenges.
