Sectoral support

Strengthening the inclusive finance sector

ADA strengthens the inclusive finance sector and supports national financial inclusion strategies in the priority countries of the Luxembourg Cooperation. 

In these countries, ADA supports institutions such as ministries, public funds and central banks to promote transparency, accountability and client protection.

Strengthening the inclusive finance sector

ADA contributes to strengthening the inclusive finance sector by getting involved in various bilateral cooperation programmes between Luxembourg and the country concerned, which offer ADA an institutional framework for providing support. In 2023, ADA helped formulate projects to support the sector and develop inclusive finance services contributing to Luxembourg Cooperation programmes in nine countries, usually in collaboration with LuxDev, the Luxembourg Development Agency.

• Rwanda

ADA drafted one of the four components of the project to support the Kigali International Finance Center (KIFC), which will be implemented by LuxDev. This component aims to support SMEs by strengthening their capabilities and developing appropriate and innovative financial services, in particular by drawing on the Young Entrepreneurs Sustainable Financing Initiative (YES-FI). ADA also helped formulate a project funded by the Luxembourg Cooperation and the European Union aimed at strengthening aquaculture and horticultural value chains. ADA created mechanisms to facilitate access to finance for actors in these value chains to help them develop their activities.

• Benin

ADA drafted the Inclusive and Innovative Finance programme with LuxDev, which provides support for the Ministry of Social Affairs and Microfinance, two public funds, the regulator and MFIs. Together, they will digitalise agricultural value chains and encourage smallholder farmers to adopt practices that help them build up resilience to climate change.

• Senegal

ADA contributed to a LuxDev project for the socio-professional integration of young people, which provided funding for 859 young people in 2023.

• Laos

ADA and the microfinance association LMFA (Lao Microfinance Association) supported a LuxDev programme to create and consolidate village banks, local microfinance structures that offer rural populations access to credit without collateral. The aim is to make these banks viable by integrating them into MFIs or consolidating them under a parent bank that is approved and supervised by the Central Bank of Laos.

Support for national financial inclusion strategies

ADA supports national institutions in implementing their national financial inclusion strategy, in particular by improving supervision of the sector, setting up refinancing mechanisms for MFIs and providing financial education for the public:

• Tunisia

ADA continued to support financial education activities for the public. A series of educational films were produced for broadcast on a private television channel. ADA also helped MFIs to design and implement an insurance product, which is due to be marketed on a pilot basis in 2024.

• Cabo Verde

ADA focused on refinancing MFIs, protecting clients and digitalising transactions. ADA notably helped the central bank to improve its reporting tools for supervising MFIs and has enabled most MFIs to digitalise their operations, in particular to submit their reports to the supervisory authorities or to generate the information requested by the credit risk center.

In 2023, the security situation in the Sahel region deteriorated, impacting ADA’s operations in three countries: 

• Niger

The military coup in July led Luxembourg to suspend its cooperation with the country, interrupting the implementation of a project to support the development of inclusive finance.

• Mali

The capital Bamako was classified a red zone, forcing ADA to suspend its monitoring of the project to support financing mechanisms for the agricultural sector supported by LuxDev.

• Burkina Faso

ADA helped draft a young people and green jobs project to support the development of financial and non-financial products that encourage green entrepreneurship and generate jobs for young people, particularly in the sustainable agriculture and construction sectors, as well as in renewable energies. Its planned launch in 2024 was put off following the deterioration of security conditions and the decision by Luxembourg’s Ministry of Foreign and European Affairs to suspend its cooperation with Burkina Faso in view of the country’s political situation.