Luxembourg's development cooperation - Annual report 2017

Luxembourg’s development cooperation has been supporting the development of microfinance and inclusive finance as mechanisms for poverty reduction for twenty years by using the expertise and potential of the Luxembourg financial centre for development cooperation purposes.

2017 featured the European Microfinance Award ceremony, a regular high-level event in Luxembourg, which took place at the EIB in the presence of their Royal Highnesses the Grand Duchess and the Grand Duke heir apparent. The Award recognises the best microfinance products promoting access to higher-quality residential accommodation for excluded, vulnerable and low-income groups that do not have access to housing finance in the traditional banking sector.

Another key event was the African Microfinance Week organised by the NGO ADA in Addis Ababa, which Minister Romain Schneider attended. The theme of this third edition of the event was inclusive finance for small and medium-sized enterprises, which have an essential role to play in terms of creating employment on a continent characterised by its young population.

In 2017, Luxembourg’s development cooperation replicated its multi-annual commitments with various partners active in inclusive finance, such as the NGO Aide au développement autonome (ADA) for the period 2018-2021, the Luxembourgish inclusive finance network, InFiNe.lu, the European Microfinance Platform (e-MFP) and the Microinsurance Network (MiN). A new partnership with the Social Performance Task Force (SPTF) was created to establish a facility enabling the improvement of the social performance of microfinance institutions in South-East Asia.

Together with the Ministry of Finance and the Ministry of Sustainable Development and Infrastructure, Luxembourg’s development cooperation continues to support investment in sustainable projects.

The Luxembourg Microfinance and Development Fund (LMDF) is a microfinance investment fund in with its headquarters in Luxembourg that provides targeted support for small and medium-sized microfinance institutions.

Luxembourg’s development cooperation contributed, via technical assistance, to the identification of projects aimed at promoting investment in forestry projects in tropical forests in Central America. The project aim is to restore secondary or degraded forested areas and to make them economically, ecologically and socially viable. The projects will be supported by investment from a new public-private fund, the Forestry and Climate Change Fund, which was launched in 2017.

Through the FEMIP Trust Fund, Luxembourg, the EIB and the NGO ADA are supporting the MicroMED Tunisia project, the aim of which is to improve the Tunisian regulatory environment and to enhance inclusive finance institutions’ capacities. As part of its collaboration with the European Investment Bank, Luxembourg’s development cooperation financed technical support for a regional microfinance project in Africa.

SOS Faim is implementing the Agri+ project under the mandate of Luxembourg’s development cooperation for the 2016-2022 period to transform and modernise family agricultural operations in Burkina Faso and Mali and facilitate their access to finance.