vritti
Changing Lives
March 2020
11
— By Mohit Bhargava
The Advent of Green Financial Inclusion
Climate change is a growing concern for central banks and financial regulators
globally. Climate change leads to extreme weather conditions like drought and
floods, which eventually displaces people, destroys crops, disrupts food supply,
creates health risk, causes loss of property and job, deepens poverty and impacts
economy. Hence, central banks and financial regulators recognize that to
maintain financial stability it is essential to enable financial inclusion and build
financial resilience amongst the vulnerable sections of the society so as to
mitigate the impact caused by climate change. To address this cause, members of
Alliance for Financial Inclusion (AFI) came together to devise ‘Green Financial
Inclusion’ work-stream.Green Financial Inclusion links the financial inclusion and
climate change challenges and focus on policies and strategies to build resilience to
social, environmental, health and economic impact of climate change.
Establishing the Link between Green Financial
Inclusion and Mobile Money
In the past decade, with mobile money accounts surpassing bank accounts in
many emerging countries, mobile money has become an integral part of the
financial inclusion strategy of multiple countries. Hence, it is evident that mobile
money will also play an important role in Green Financial Inclusion. Mobile
money can help to create resilience to climate change by facilitating service such
as financial aid, pooling emergency funds, insurance, savings, credit, remittances
and digital payments. In fact, there are already some examples of mobile money
service enabling green financial inclusion. These examples are discussed in this post.