What is the difference between inclusive finance and financial inclusion?

Financial inclusion strives to remove the barriers that exclude people from participating in the financial sector and using these services to improve their lives. It is also called inclusive finance.

What are the disadvantages of green banking?

Green banking practices have several disadvantages. One major challenge is the reluctance of banks to finance innovation aimed at reducing polluting activities , as it risks devaluing their legacy positions with incumbent clients.

How does green finance work?

Simply put, green finance is a loan or investment that promotes environmentally-positive activities, such as the purchase of ecologically-friendly goods and services or the construction of green infrastructure .

What is the main aim of financial inclusion?

It primarily aims to include everybody in the society by giving them basic financial services without looking at a person's income or savings . Financial inclusion chiefly focuses on providing reliable financial solutions to the economically underprivileged sections of the society without having any unfair treatment.

Is inclusion and inclusive the same thing?

Inclusiveness is the outcome of the process of inclusion . That means that inclusion uses diversity as a resource to enhance inclusiveness. Inclusiveness is also the ability of a community to include all its members and avoid excluding any of them.

How do green banks make money?

Some green banks make direct loans while others provide credit support to local lenders who make the loans . Green banks can also make equity investments, but they don't take deposits.

What is the difference between banking and green banking?

Green banking refers to the promotion of environmentally friendly practices and the reduction of the bank's carbon footprint . It's similar to a traditional bank because it examines all social, environmental, and ecological concerns with the goal of protection and conservation of natural resources and the environment.

How is green finance different from finance?

Sustainable finance includes environmental, social, governance and economic aspects. Green finance includes climate finance but excludes social and economic aspects .

What is the future of green finance?

Future of green finance in India The purpose is to ensure funds are utilized for energy efficiency, clean transportation, climate change adaptation, sustainable water and waste management, green buildings, and terrestrial and aquatic biodiversity conservation.

What is inclusive green finance a policy and advocacy approach?

Titled, Inclusive Green Finance: A Policy and Advocacy Approach, it aims to highlight the interdependent and amplifying role of financial inclusion in global sustainability efforts and strengthen climate considerations in financial inclusion plans and strategies.

What is a fact you now know about green finance?

By integrating sustainability principles into financial decision-making, green finance contributes to a more sustainable and resilient economy. It supports initiatives aimed at reducing carbon emissions, promoting renewable energy, improving resource efficiency, and conserving biodiversity.

What are the different types of green finance?

Green bonds, green loans, green equity, green microfinance, and green insurance are just some of the different types of green finance instruments available. With the help of these instruments, we can work towards a more sustainable future.

What are the topics related to green finance?

Typical projects that fall under the green finance umbrella include: Renewable energy and energy efficiency . Pollution prevention and control. Biodiversity conservation.

What does inclusive mean in finance?

Finance becomes inclusive from the moment when it enables a given beneficiary, such as a family, a young entrepreneur, a larger firm to access to an suite of services and products, sometimes personalised, which respond to a specific need.

Inclusive Green Finance - Alliance for Financial Inclusion (2024)

Financial policymakers and regulators across the AFI network recognize the dual threats of financial exclusion and climate change as key barriers to financial stability, as well as the role of financial inclusion in helping vulnerable communities build resilience and mitigate losses caused by climate change.

Through effective financial inclusion policies, regulation and national strategies, inclusive green finance (IGF) is helping mitigate and build resilience against the negative impacts of climate change. Under the IGF remit, financial institutions are providing vital support to those navigating an uncertain environment by promoting green products within savings, credit, insurance, money transfers and new digital delivery channels.

By doing so, IGF plays a key role in enabling the implementation of the UN Sustainable Development Goals (SDGs), particularly SDG 1 (no poverty), SDG 7 (affordable and clean energy) and SDG 13 (climate action).

Fundamental and emerging topics under IGF are explored in-depth through AFI’s Inclusive Green Finance Working Group (IGFWG).

Sharm El Sheikh Accord: Financial Inclusion, Climate Change & Green Finance
The Sharm El Sheikh Accord was endorsed by AFI members at the 2017 AFI Global Policy Forum. It commits AFI members to work together and with partners to identify, understand and implement financial inclusion policy solutions that also have positive outcomes for the environment, focusing on communities that are most vulnerable to climate change.

AFI’s Inclusive Green Finance workstream is part of the International Climate Initiative (IKI), supported by the German Federal Ministry for Economic Affairs and Climate Action (BMWK), based on a decision by the German Bundestag.

IGF Maya Declaration Commitments by AFI members

Bangladesh Bank (jointly with the Microcredit Regulatory Authority and Ministry of Finance), Reserve Bank of Fiji and Central Bank of Egypt were the first AFI members to make Maya Declaration targets on climate change. They were joined by Central Bank of Solomon Islands, Reserve Bank of Zimbabwe, Superintendencia de la Economia Popular y Solidaria de Ecuador and Bank of Zambia, all of which made commitments on IGF at the 2019 AFI Global Policy Forum.