First published on Microfinance Gateway, December 2015
When we use the word sustainability in financial inclusion terms, what does it mean? Does it stand for profit or a long-term perspective that looks beyond the next reporting deadline? Is it a code word for triple bottom line accounting – people, planet, profit? Or maybe sustaining financial services in the face of natural disaster or armed conflict? What about crisis avoidance – cooling overheating markets and preventing over-indebtedness?
At this year’s European Microfinance Week (EMW) in Luxembourg, sustainability meant all those things and more. Titled Financial Inclusion for Sustainable Development, the conference featured multiple workshop streams reflecting the breadth and importance of the topic - with sessions on green microfinance; MIV governance; long-term risk planning; and new tools, such as MIMOSA, to assess market saturation.
As e-MFP Chairwoman Anne Contreras stated: “it means financial sustainability – identifying overheated and underserved markets. It means encouraging funding for the sector with a long-term outlook, not short-term returns. It means new approaches to managing risk and expanding outreach through better understanding of client needs and developing tools to reach them effectively and affordably. It means driving social sustainability - protecting clients from shocks in difficult contexts and providing them with a suite of financial services for sustainable livelihoods. And of course it means environmental sustainability – through finance for clean energy products and improved agricultural practices. What they have in common is an emergent long-term thinking about the future of the Financial Inclusion sector, and of its clients.”
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