Alliance for Financial Inclusion

In 2006, there was an emerging recognition that policies mattered when it came to financial inclusion.There is also a huge sentiment around the potential of digital financial services for increasing financial inclusion for the unbanked population of the world.

Dr. Hannig described the situation in 2006 as follows:[7]

There was a lot of international debate on financial system development and what the financial sector can do to alleviate poverty through microfinance. ... We were just starting to see the potential of digital financial services for increasing financial inclusion for the unbanked.

Through the Gates Foundation, Dr. Alfred Hannig and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) team successfully received grants to kick-off the first phase of AFI in Bangkok, Thailand and subsequently launched it in Kenya in 2009.

Bangko Sentral ng Pilipinas (BSP) of the Philippines, Bank Indonesia (BI), Bank of Thailand (BOT), Central Bank of Kenya (CBK), Superintendency of Banking, Insurance and Private Pension Fund Administrators (SBS) of Peru and National Banking and Securities Commission of Mexico comprised the initial core group of six member institutions. In 2009, the first AFI Steering Committee meeting took place where the Central Bank of Kenya was elected the Chair. Besides, in 2009, AFI gained 44 new members including Bangladesh Bank, Reserve Bank of Fiji, National Reserve Bank of Tonga, and Commission Bancaire de l'Afrique Centrale (COBAC) — representing 70 percent of the world’s unbanked population. Members of the AFI network also reported making 3 policy and regulatory reforms to enhance financial inclusion in their countries. 2009 also witnessed the first AFI Global Policy Forum (GPF) which was held in Nairobi, Kenya with the theme, A marketplace of ideas. Grants to selected member institutions were introduced.

In 2010, the Group of 20 (G20) nominated AFI as one of three implementing partners for the G20 Global Partnership for Financial Inclusion (GPFI). In this role, AFI brings innovative policies for increasing access to financial services from developing countries to the wider G20 forum and facilitates the participation of non-G20 policymakers in developing and emerging economies participate in GPFI work.[8]

In 2011, AFI members collectively adopted the Maya Declaration, a statement of intent to make financial inclusion a centerpiece of national efforts for poverty reduction, economic stability, and economic development. More than 30 AFI member countries then went a step further by announcing specific and measurable commitments. As of 2017, 66 member countries of AFI have committed to the Maya Declaration. Examples of commitment include[9]:

• Reducing the financial exclusion rate of women from 27% to 13% by 2025 in Cambodia.
• Developing and implement a financial consumer protection framework, focusing on women, by December 2018 in Lesotho
• Reducing the gender gap for formal financial services inclusion from 10% to 5% by 2022 in Zambia

Since then, the Maya declaration has paved the way for various other accords in the coming years. In recognition of these developments, both the G20 and the Group of 24 (G24) highlighted the AFI learning model and the Maya Declaration as key steps toward global economic development, with the G20 urging its members to commit to the Maya Declaration.[10]

In 2013, AFI members adopted the Sasana Accord on Evidence- and Data-based Results, Accelerated Progress and Measurement of Impact.[11] During the same year, AFI reached 100 member institutions overall with the addition of the Central Bank of Trinidad and Tobago[12]

In 2015, AFI members endorsed the Maputo Accord, which commits members to support access to finance for small and medium enterprises.

In 2016, AFI completed the final steps in its evolution from an exclusively donor-funded project into an independent and member-supported international network of policymakers. Members also endorsed the Denarau Action Plan for Gender Inclusive Finance[13] to increase women's access to quality and affordable financial services globally — bridging the financial inclusion gender gap.

In 2017, AFI members adopted the Sharm El Sheikh Accord on Financial Inclusion, Climate Change and Green Finance.[14]

In 2018, AFI celebrated its 10th anniversary at its GPF in Sochi, Russia. During the event, members endorsed the Sochi Accord on FinTech for Financial Inclusion.[15]

In 2019, a letter of understanding was signed between AFI and the Ministry of Finance of the Grand Duchy of Luxembourg to launch a new multi-donor collaboration framework to bolster financial inclusion across the African continent.[16] Minister Pierre Gramegna signed the multilateral LOU, together with AFI Executive Director Dr. Alfred Hannig. The cooperation is rooted in the support toward the advancement of the Sustainable Development Goals (SDGs).

On 31 December 2019, health authorities in China reported to the World Health Organization (WHO) a cluster of viral pneumonia cases of unknown causes in Wuhan, Hubei.[17][18] On 30 January, the WHO declared the outbreak a Public Health Emergency of International Concern (PHEIC)—7,818 cases confirmed globally, affecting 19 countries in five WHO regions. As of 19 June 2020, more than 5 million cases of Coronavirus disease 2019 (COVID-19) have been reported in more than 188 countries and territories, resulting in more than 453,000 deaths.[19]

AFI has responded by implementing the AFI's COVID-19 Policy Response that aimed to systematically deliver coordinated policy responses to help AFI members mitigate the impact of COVID-19 on financial inclusion policy implementation, especially for micro, small and medium enterprises and the most vulnerable segments of the population. Virtual engagements were conducted during the lockdown period with technical teams and leadership across its member countries to address specific issues. A series of member needs surveys were distributed to enable AFI to deploy rapid policy response guidelines.[20]

Since the offset of the pandemic, which triggered widespread unemployment and falling levels of gross domestic product and disproportionately impacting the most disadvantaged segments of populations, AFI partnered with the Mastercard Foundation in June 2020 to implement a 2-year COVID-19 Policy Response program in Africa.[21] The program targeted 49 financial sector regulators and policymaking institutions across the region to effectively respond to the economic consequences of the pandemic. In-country implementation activities were conducted specifically in Nigeria, Uganda, Rwanda, Senegal, Ghana, and the Central Bank of West African States.

Examine the importance of consumer empowerment and protection to improve the quality of financial services. CEMC Working Group also advance policy and regulatory issues related to consumer empowerment initiatives and market conduct regulations.[23]

Discuss issues related to digital financial services, and promote digital finance as a major catalyst in achieving financial inclusion in emerging and developing countries. DFS Working Group develop policy guidelines, conduct peer reviews, and engage the FinTech industry and global Standard-Setting Bodies (SSBs).[24]

Build knowledge and good practices on areas related to financial inclusion measurements such as indicators, methodologies, global standards, and principles.[25]

Promote the development, implementation, and monitory and evaluation of national financial inclusion strategies.[26]

Provide technical support on the proportionate application of global standards while supporting, exchanging and discussing measures that strengthen and balance both financial sector stability and integrity.[27]

Discuss and create financial policies that build resilience and to mitigate the effects of climate change. [28]

Promote the discussion and implementation of smart policy frames that facilitate access of micro, small, and medium enterprises (MSMEs) to finance, and provide a platform for members to discuss related challenges and opportunities.[29]