Microfinance & finance inclusive
Over the past two decades, Luxembourg, via the Directorate of Development Cooperation at the Ministry of Foreign and European Affairs and the Finance Ministry, has actively supported the development of microfinance and inclusive finance as tools for promoting development and ending poverty. Luxembourg's objective is to provide an impoverished population, typically cut off from formal financial services, with access to basic financial services such as, in particular, loans, savings, money transfer and micro-insurance.
Since the first micro-credits granted to impoverished communities in South Asia, since the tontines in Africa and the cooperatives in Latin America, microfinance has followed a remarkable trajectory culminating, in terms of international visibility, in the Nobel Peace Prize awarded to Professor Muhammad Yunus and the Grameen Bank in 2006.
The 2015 Addis Ababa Action Agenda on development finance also refers to microfinance, to the need to sustain micro-enterprises and to financial inclusion and recognises the value it adds to development. Similarly, the 2030 Agenda for Sustainable Development cites microfinance as a tool for implementing goals 1 to end poverty and 8 aiming to promote inclusive and sustainable economic growth, employment and decent work for all.
Since the beginning of the 1990s, the Directorate for Development Cooperation has collaborated with civil society players specialising in microfinance. Since this time Luxembourg's cooperation programme has helped this sector progress by assisting with its concept development work, by supporting the research and development of new tools, by its political activity in numerous national and international fora, by its discussions with its partners, both bilateral and multilateral, public and private, or members of civil society and by its financial commitment to a multitude of active participants and to programmes implemented in this arena.
Luxembourg has therefore become an important international player in this field and remains firmly committed to supporting NGOs and institutions involved in microfinance, most of which are to be found at the Maison de la microfinance in Luxembourg City. Prominent amongst these these partners are: Appui au Développement autonome (ADA), European Microfinance Platform (e-MFP), Inclusive Finance Network Luxembourg (InFiNe.lu), Luxembourg Microfinance and Development Fund (LMDF), Microinsurance Network (MiN). The Luxembourg Directorate for Development Cooperation also works with other partners such as the Banque européenne d’investissement (BEI), the NGO SOS Faim, LuxFLAG or else the Consultative Group for the Assistance of the Poor (CGAP).
In 2016, Luxembourg allocated 10 million euros of official development assistance to inclusive finance activities.