INCLUSIVE AND INNOVATIVE FINANCE

By leveraging Luxembourg’s expertise as a global leader in finance, Luxembourg Development Cooperation is promoting inclusive, sustainable solutions to strength local financial systems and improve access by vulnerable groups to suitable services, thus contributing to socio-economic development. Leveraging new financial tools, innovative finance may be seen as a diverse set of financial solutions and mechanisms that create effective ways to channel both private capital from financial markets and public resources towards tackling development challenges.

In 2024, a key milestone in this sector was the establishment of the International Social Finance Accelerator (ISFA), an initiative that complements and expands the framework of the International Climate Finance Accelerator (ICFA). Launched in partnership with the Ministry of the Environment, Climate and Biodiversity, the Ministry of Finance and private partners, the ISFA aims to support social impact fund managers in their initial phases, offering them financial and technical support to structure innovative solutions that mobilise financial capital for social impact, with a focus on poverty reduction and improved living conditions in the most vulnerable regions.

Luxembourg Development Cooperation has also sought to consolidate its commitment to the fintech sector to promote inclusive finance by signing a partnership with the Luxembourg House of Financial Technology (LHoFT), with the aim of expanding the scope of its CATAPULT: Inclusion programme to cover South-east Asia and Central America.

Support for the Inclusive Finance Network Luxembourg (Infine.lu), the Luxembourg inclusive finance platform, and the Consultative Group to assist the Poor (CGAP) has also been renewed.

The year 2024 also featured the European Microfinance Week, an annual fixture for experts in the sector, which took place from 13 to 15 November 2024. It was organised by the European Microfinance Platform (e-MFP) and the Inclusive Finance Network Luxembourg ASBL (InFiNe.lu), with the support of the Directorate for Development Cooperation and Humanitarian Affairs. On 14 November 2024, at a ceremony chaired by H.R.H. the Grand Duchess at the EIB, the European Microfinance Prize was awarded to Rural Finance Initiative Limited (RUFI), a microfinance institution in Uganda, in recognition of its efforts in the field of financial inclusion for refugees and forcibly displaced persons.