Luxembourg's development cooperation - Annual report 2018

For over twenty years, Luxembourg’s development cooperation has been supporting the development of microfinance and inclusive finance in order to reduce global poverty by using the expertise and potential of the Luxembourg financial centre to promote economic development and inclusive growth.

The annual flagship event in Luxembourg is the European Microfinance Award ceremony, a regular high-level event in Luxembourg, which took place in the atrium of the European Investment Bank (EIB) in the presence of the Minister for Development Cooperation and Humanitarian Affairs and around 400 experts in the sector. In 2018, the Award recognised the best technological innovations enabling financial service providers to extend their coverage, increase their range of products, improve customer experience and enhance operational effectiveness, all guided by a firm, steadfast commitment to socially responsible finance.

In 2018, Luxembourg’s development cooperation extended its multiannual commitment with the CGAP, a key partner in inclusive finance, as well as with the labelling agency LuxFlag, which analyses the quality of the investment funds in microfinance and in the other sub-sectors of sustainable finance. 

A new partnership with the Social Performance Task Force (SPTF) has been created. This alliance has enabled a permanent presence in Luxembourg to be established via the creation of the SPTF Europe asbl, that promotes its best practice and standards of management of social performance in the financial sector.

The MicroMED project in Tunisia, which was supported by the FEMIP Trust Fund in partnership with the EIB and the NGO ADA, ended in 2018 after improving the Tunisian regulatory environment of the inclusive finance sector following the Arab spring. A follow-up to this project is planned. As part of its collaboration with the EIB, Luxembourg’s development cooperation financed technical support for a regional project to provide training to microfinance institutions in Africa on social impact.

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.

Together with the Ministry of Finance and the Ministry for the Environment, Climate and Sustainable Development, Luxembourg’s development cooperation is continuing to support investment in sustainable projects.

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

Luxembourg’s development cooperation contributes, via technical assistance, to promote 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. A new public-private fund, the Forestry and Climate Change Fund, will invest in these projects.