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:[4]

"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.

Less than two years after its launch, AFI went from an initial founding core group of five member institutions to members in more than 60 countries, representing nearly 70 percent of the world’s unbanked population.

In 2009, the network saw the first AFI Global Policy Forum, which was held in Nairobi, Kenya under 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 brought policies for increasing access to financial services from developing countries to the wider G20 forum and facilitated the participation of non-G20 policymakers in developing and emerging economies participate in GPFI work.[5]

At the 2011 GPF in Mexico’s Riviera Maya, AFI members collectively adopted the Maya Declaration, a global initiative for responsible and sustainable financial inclusion that aims to reduce poverty and ensure financial stability for the benefit of all. It is a statement of common principles regarding the development of financial inclusion policy.

More than 30 countries represented by AFI member institutions, went a step further by announcing specific and measurable commitments. As of October 2021, AFI member institutions have made a total of 885 Maya Declarations targets.

The Maya Declaration has paved the way for various other accords. 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.[6]

In 2013, AFI members adopted the Sasana Accord on Evidence- and Data-based Results, Accelerated Progress and Measurement of Impact.[7] During the same year, AFI reached 100 member institutions overall with the addition of the Central Bank of Trinidad and Tobago[8]

In 2015, AFI members endorsed the Maputo Accord, which commits members to support access to finance for small and medium enterprises. It also established its headquarters in Kuala Lumpur, Malaysia, which are hosted by Bank Negara Malaysia.

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[9] 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.[10]

In 2018, AFI set up its Africa Regional Office in Abidjan, Côte d'Ivoire, co-hosted by the country’s Ministres de l'Économie et des Finances and Banque Centrale des États de l'Afrique de l'Ouest (BCEAO). That same year, AFI also celebrated its 10th anniversary at its GPF in Sochi, Russia. During the event, members endorsed the Sochi Accord on FinTech for Financial Inclusion.[11]

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.[12] Minister Pierre Gramegna signed the multilateral letter of undertaking, together with AFI Executive Director Dr. Hannig. The cooperation is rooted in the support toward the advancement of the Sustainable Development Goals.

The COVID-19 pandemic triggered widespread unemployment and falling levels of gross domestic product and disproportionately impacting the most disadvantaged segments of populations. This led to the implementation of AFI’s COVID-19 Policy Response, which 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 (MSMEs), women, youth, forcibly displaced and other 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.

AFI partnered with the Mastercard Foundation to implement a two-year COVID-19 Policy Response program in Africa. 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 BCEAO member jurisdictions.

Responding to global trends, Dr. Hannig described in 2021 a recent evolution in financial inclusion:

“Financial inclusion is no longer just about access to finance and bringing unreached groups into access to formal financial services. [It] is becoming more about maintaining high levels of safe and sound financial access, with increasing usage and quality of financial services … embracing important issues such as financial health and financial resilience, with the ultimate objective to ensure financial stability”[13] – Dr. Alfred Hannig, AFI Executive Director

AfPI is the primary platform for AFI members in Africa to support and develop financial inclusion policies and regulatory frameworks, and to coordinate regional peer learning efforts. From AFI’s regional office in Abidjan, Côte d'Ivoire, AfPI brings together high-level representatives from African financial policymaking and regulatory institutions to enhance the implementation of innovative financial inclusion policies across the continent.

Key AfPI initiatives include leaders’ roundtables, private-public dialogues, capacity building workshops, developed-developing country dialogues and meetings of its experts’ group on financial inclusion policy.

As of 2021, 39 AFI member institutions from 37 countries participate in AfPI. Together, they have implemented 251 policy changes that can be attributed to the regional initiative’s work in financial inclusion. They have also published 15 knowledge products and 331 Maya Declaration commitments.

Launched at the 2018 AFI GPF in Sochi, Russia, ECAPI aims to resolve regional challenges and elevate the voice of Eastern European and Central Asian nations on key financial inclusion policy issues. Countries within the region require focused and tailored solutions to tackle its financial inclusion challenges, including low levels of financial literacy, high volume of remittances and underdeveloped consumer protection policies.

While the region has witnessed significant advancements in financial access in recent years, at least 121 million people remain excluded from formal banking. Through the activities implemented in ECAPI, members aim to:

•         Increase access to financial services for the 50 percent unbanked youth.
•         Address the regional six percent gender gap.
•         Reduce the 25 percent gap in access between those with lower and higher levels of education.
•         Focus on advancing financial inclusion for the poorest 40 percent of the population.

As of 2021, seven AFI member institutions in seven countries collaborate under ECAPI. They have implemented 29 policy changes linked to the regional initiative’s work in financial inclusion, published four knowledge products and made 53 Maya Declaration commitments.

FIARI is a regional platform created amid growing demand from member institutions for tailored solutions to regional financial inclusion issues. Launched by the Arab Monetary Fund, GIZ and AFI in 2017, and later joined by the World Bank, it aims to enhance access to financial services in the Arab region through effective coordination mechanisms and supporting the implementation of national financial inclusion policies.

As of 2021, FIARI comprises 22 AMF member institutions, including eight AFI members. Within the AFI network, members’ contributions has led to the implementation of 34 policy changes and 74 Maya Declaration commitments in the Arab Region.

FILAC is a regional initiative that aims to be the driving force for advancing financial inclusion in Latin American and Caribbean countries. It was launched in 2016 with support from Canada’s International Development Research Center.

As of 2021, FIARI’s 12 AFI members in 11 countries have implemented 99 policy changes and published 13 knowledge products. They have made 174 Maya Declaration commitments.

Officially launched in Dili, Timor-Leste, in 2015, PIRI aims to make formal financial services accessible to all Pacific Islanders through its unique model of south-south engagement and peer learning. The region has one of the highest rates of unbanked persons globally due to factors including geographically dispersed islands, small populations and limited banking infrastructure.

The initiative invites AFI member institutions to share in a common vision while working toward ensuring that financial services are widely accessed throughout the region. With PIRI, AFI has created a unique model of south-south engagement and peer learning that aims to provide all low-income Pacific Islanders with access to formal and informal financial services.

As of 2021, the regional initiative comprised eight AFI members in eight countries. Their work has contributed to 65 policy changes and led to the publication of eight knowledge products. Members have made 66 Maya Declaration commitments.