The Asian Development Bank (ADB) signed a memorandum of understanding (MOU) with the Alliance for Financial Inclusion (AFI) to promote greater financial inclusion in the Asia and Pacific region. The MOU will enable the two institutions to work more closely to enhance peer learning and knowledge sharing in advancing financial inclusion policies in the region.
The agreement was signed by Senior Director of ADB’s Sustainable Development and Climate Change Department Gil-Hong Kim and AFI Executive Director Alfred Hannig on the sidelines of the 2nd Asia Finance Forum held at ADB headquarters in Manila from 8-10 November.
“Financial inclusion is crucial to assist people in Asia and the Pacific, particularly the poor, in accessing credit and insurance products that help them manage risk, build assets, increase their incomes, and enjoy a better life,” said Mr. Kim. “ADB’s partnership with AFI will help boost our joint efforts in pursuing inclusive and sustainable development in the region.”
“Smart financial inclusion policies promoted and implemented by AFI members are reducing inequality and contributing to overall sustainable economic growth. The partnership between ADB and AFI will further advance financial inclusion, helping low income and unbanked citizens of Asia and the Pacific increase their economic welfare,” said Mr. Hannig.
Under the MOU, ADB and AFI will work together to develop and implement programs and projects, including technical cooperation for capacity building, that promote digital financial services; scale up innovations; advance policy peer learning; reduce gender gap in lending; develop climate-sensitive financial inclusion policies; and increase cooperation between the public and private sectors.
AFI is a member-owned peer learning and knowledge sharing network of over 110 financial inclusion policy-making and regulatory institutions form 95 developing and emerging countries around the world, covering up to 85% of the world’s unbanked. AFI develops and promotes evidence-based policy solutions that help improve the lives of an estimated 2 billion unbanked—almost half of the world’s adult population who do not have access to formal financial services.
ADB has been working to improve financial inclusion in Asia and the Pacific, approving 158 projects worth $2.8 billion cumulatively as of September 2017. In Papua New Guinea, an ADB microfinance and employment project helped expand rural communities’ access to financial services and improve financial literacy of over 120,000 people, 40% of whom are women. ADB also helped widen the scope of the Bank of Georgia’s support for micro, small, and medium-sized enterprises, which helped create 5,000 to 10,000 new jobs in the country.
These projects are helping unlock opportunities for the unbanked and underbanked in the region, while developing local financial markets through policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. ADB support also focuses on emerging areas such as digital finance and green and disaster risk finance.