Financial Inclusion Insights

📊 Exciting new research from the European Central Bank (ECB) sheds light on how banks are pricing climate risk in their lending practices! 🌿 In their working paper, Carlo Altavilla, Miguel Boucinha, Marco Pagano, and Andrea Polo combine euro-area credit register data with carbon emission information to uncover fascinating insights into the intersection of finance and climate change. 🏦 The study finds that banks are indeed factoring climate risk into their lending decisions. Firms with higher carbon emissions face higher interest rates, while those committed to reducing emissions enjoy lower rates. Interestingly, banks that have publicly committed to decarbonization goals (through initiatives like Science Based Targets initiative) are even more aggressive in this pricing strategy. 💶 But here's where it gets really intriguing: the researchers uncovered a "climate risk-taking channel" of monetary policy. When the ECB tightens monetary policy, banks not only increase their overall credit risk premiums but also amplify their climate risk premiums. This means that during periods of monetary tightening, high-emission firms face a double whammy of increased borrowing costs and reduced access to credit compared to their greener counterparts. The authors argue that while restrictive monetary policy may slow down overall decarbonization efforts, it inadvertently creates a more favourable environment for low-emission firms and those committed to going green. 🌍 These findings are crucial for understanding how the financial sector is adapting to climate change and how monetary policy interacts with climate-related financial risks. It's also clear that the greening of finance is not just a trend, but a fundamental shift in how risk is assessed and priced in our economy. #ClimateFinance #SustainableBanking #MonetaryPolicy #ECB #GreenEconomy #ClimateRisk

Indian women have done everything the financial system asked. Opened accounts. Saved diligently. Built credit histories. But. We receive credit equivalent to just 25%+ of the deposits we put into the banking system. Men receive 50%+ of that, double what we get. We are, in effect, subsidising credit for men. The credit system was built to read a specific kind of financial life - formal salary, titled property, guarantors from the right networks. Women’s income is often informal, seasonal and home-based. Our assets are rarely in our names. So, the traditional system writes us off rather than underwrite us. Consider this - Women constitute 20% of India’s MSMEs and hold just 7% of MSME credit. However, we have better data today than we had decades ago. Digital payments history, Aadhaar-linked identities, GST trails and much more. If you are building a lending product, whether you’re a bank or a fintech, the question is whether you’re reading the additional signals, in fact the signals that can make or break women’s credit. 45 crore of us are credit-eligible and waiting. Is the ecosystem ready for us? Source: NITI Aayog-TransUnion CIBIL-MicroSave Consulting 2025, Microsave 2020 #CreditAccess #WomenEntrepeneurs #FinancialInclusion #IndiaFintech

Here's how UPI turned 200 million Indian women into entrepreneurs when banks couldn't!  Before UPI, most women running small businesses worked in cash, with no bank trail, no credit access, and no real way to grow beyond their local circle. Fast forward to 2025, with 536 million women aged 15+ in India and 37% already using mobile internet, the potential market for internet-based UPI solutions is approximately 200 million women. In a country where 65% of women in the workforce are self-employed, digital financial inclusion creates tangible economic empowerment. But UPI is doing more than digitizing payments: ➡️ It builds financial history and business credibility ➡️ Unlocks access to loans, insurance & government schemes ➡️ Helps women manage and grow money independently We're already seeing this in action: — Women dairy farmers in Maharashtra now use UPI to sell directly to cooperatives. — Street vendors in Gujarat track daily income through digital payments. — Self-help groups in Bihar pool savings and access microloans through mobile wallets. Because for many women, the journey to digital confidence starts when someone they trust. These are some schemes that are helping women adopt UPI… 📍 UPI for Her – Tailored digital tools by NPCI & Women’s World Banking for women-led micro-businesses 📍UPSRLM (Uttar Pradesh State Rural Livelihood Mission) – Local women agents trained to onboard others with confidence 📍MAVIM(Mahila Arthik Vikas Mahamandal) – Helping rural women switch from cash to UPI and grow their ventures 📍WEP (Women Entrepreneurship Platform) – A national platform connecting women entrepreneurs with digital and financial support Digital payments give women more visibility. This visibility leads to more control over both their business and household money. How has digital banking changed your business?

Over the past few weeks, the Reserve Bank of India has released a series of circulars that, at first glance, might seem unrelated. But look closer, and a clear narrative emerges. The RBI is laying the groundwork for a future-ready financial ecosystem — one that is digitally secure and transparent, environmentally conscious, customer-centric, and inclusive. Let’s connect the dots: 1. 𝐃𝐢𝐠𝐢𝐭𝐚𝐥 𝐋𝐞𝐧𝐝𝐢𝐧𝐠 𝐃𝐢𝐫𝐞𝐜𝐭𝐢𝐨𝐧𝐬 2025: Consolidates past norms, tightening rules on data privacy, borrower protection, and transparency. Introduces a registry for Digital Lending Apps and oversight of Default Loss Guarantees. 2. 𝐄𝐒𝐆 & 𝐂𝐚𝐫𝐛𝐨𝐧 𝐂𝐫𝐞𝐝𝐢𝐭 𝐅𝐫𝐚𝐦𝐞𝐰𝐨𝐫𝐤𝐬: Encourages banks to integrate environmental and social risk into credit decisions and explore carbon markets. 3. 𝐂𝐫𝐞𝐝𝐢𝐭 𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐄𝐧𝐡𝐚𝐧𝐜𝐞𝐦𝐞𝐧𝐭𝐬: Aims to improve credit data accuracy and inclusion, especially for MSMEs and women-led businesses. They’ve clearly been at work for longer. Looking further back at just the last year: 4. 𝐂𝐥𝐢𝐦𝐚𝐭𝐞 𝐑𝐢𝐬𝐤 & 𝐒𝐮𝐬𝐭𝐚𝐢𝐧𝐚𝐛𝐥𝐞 𝐅𝐢𝐧𝐚𝐧𝐜𝐞 𝐏𝐚𝐩𝐞𝐫: Initiated a consultative process on climate disclosures, green taxonomy, and ESG-linked covenants. 5. 𝐆𝐫𝐞𝐞𝐧 𝐁𝐨𝐧𝐝𝐬 & 𝐄𝐒𝐆 𝐋𝐨𝐚𝐧𝐬: Banks began issuing sustainability-linked instruments, incentivized by RBI’s stance. 6. 𝐓𝐑𝐞𝐃𝐒 𝐄𝐱𝐩𝐚𝐧𝐬𝐢𝐨𝐧: Promoted digital invoice financing for MSMEs by easing norms for NBFC-Factors. The RBI isn’t doing regulatory housekeeping — it’s architecting the future of Indian finance. As banking, financial, and fintech professionals, we should be aligning to this vision already today. Yes, the usual arguments exist — it’s not revenue-generating, it’s too far out, we need to focus on now. And “let’s do it because it’s the right thing” isn’t enough to run a business. But can we creatively embed these foundations into our models and systems so we’re progressively ready? We at Zeta saw the fragmentation in banking and built Tachyon — a unified digital native, cloud platform for payments, savings, credit, loans and more. It took over a decade of belief and patience, but it’s playing out at scale today as siloed legacy systems are just not able to meet the demands of customers, bankers and regulators alike I do believe ethical and sustainable digital banking will be another such future-defining wave

#FinTech Women of #Bharat report provides strategic recommendations and #innovation prompts for #financialservice providers to develop tailored solutions for diverse segments such as homemakers, #farmers, textile workers, and teachers. For Rural Women: • Homemakers (140 Million):     ◦ Microsavings tools for household budgeting and long/short-term goals.     ◦ Flexible credit for emergencies, aligned with local store credit cycles.     ◦ Homepreneur starter micro-loans for training, tools, and setup. • Farmers and Agricultural Workers (60+ Million):     ◦ Digital wage access + daily wage saver accounts.     ◦ Alternative credit scoring for farmers without land titles.     ◦ Income protection coverage.     ◦ Agribusiness starter loans for training, tools, and setup. • Livestock Rearers (14 Million):     ◦ Digital earnings access + cattle registration.     ◦ Collective enterprise starter packs: group capital for equipment, storage, and market access. • Shop Owners, Assistants and Retail Workers (3.8 Million):     ◦ Women-focused bulk purchase platforms for better supplier access and pricing.     ◦ Microcredit for stock replenishment without disrupting cash flow.     ◦ Earnings digitization and recognition for informal family helpers. • Textile Workers (3.6 Million):     ◦ Cash flow-linked working capital.     ◦ Earnings digitization and recognition for informal family helpers. • Handicraft Artisans (1.7 Million):     ◦ Market-linkage financing for bulk orders, fairs, and exhibitions.     ◦ Tools to manage cash flows, marketing, and scaling.     ◦ Earnings digitization and recognition for informal family helpers. • Mining and Construction Workers (4 Million):     ◦ Digital wage access + daily wage saver accounts.     ◦ Flexible income protection for job loss, accidents, and health risks. • Tutors and School Teachers (3 Million):     ◦ Employer-linked savings and retirement plans.     ◦ Income booster packages for private tutors, including credit and prepaid learning plans. For Urban Women: • Shop Owners, Assistants, and Retail Workers (4 Million):     ◦ Women-focused bulk purchase platforms for better supplier access and pricing.     ◦ Microcredit for stock replenishment without disrupting cash flow.     ◦ Earnings digitization and recognition for informal family helpers. • Cooks and Cleaners (5.4 Million):     ◦ Income-linked credit based on work history and employer references.     ◦ Income protection coverage. • School Teachers (3.4 Million) ◦ Employer-linked bridge loans for salary or healthcare gaps.     ◦ Specialized credit for upskilling and certification. • Textile Workers (3 Million):     ◦ Flexible income protection for job loss, accidents, health risks.     ◦ Employer-linked bridge loans for salary or healthcare gaps. • Clerks (2 Million):     ◦ Micro-investment tools for small, automated savings.     ◦ Career progression #credit for certifications or role transitions.

A dedicated bank for microcredit in Bangladesh—this is a bold and visionary step by the Chief Advisory Professor Muhammad Yunus. His plan to establish a specialized microcredit bank acknowledges what we’ve long known: when you invest in women, you invest in long-term prosperity for communities and economies. This is also a perfect 'graduation' scheme that the current microfinance organizations need. But, we can go even further with this. Imagine if we provided capital to these women and recognized and quantified their impact on families, climate resilience, and inclusive growth. That’s what we do at IIX through our IIX Values™ system, capturing real-time data directly from women at the last mile and linking it to capital markets. This data isn’t just about impact—it’s a risk mitigant. It can form the basis of innovative financial structures like the Orange Guarantee Facility, which IIX is currently creating in Australia. A similar facility in Bangladesh could work with banks to de-risk lending to women and small businesses, channeling more capital to where it creates the most sustainable value. This is how we move from intention to systemic change—from microcredit to macro-impact. #OrangeMovement #WomenLedFinance #IIXValues #ImpactInvesting #Bangladesh #ProfYunus #InclusiveFinance #GenderLensInvesting #Microfinance #FinancialInnovation Chief Adviser of the Government of Bangladesh | Lutfey Siddiqi | Dhaka Tribune | IFC - International Finance Corporation https://lnkd.in/gD5CCcpa

🌏 Catalyzing a Greener Future: Financial Market Innovation as a Cornerstone for ASEAN's Sustainable Ambitions 🌏 The journey toward a sustainable global future hinges on the crucial role of finance in channeling capital toward environmentally and socially responsible initiatives. In the dynamic and rapidly developing region of Southeast Asia (ASEAN), financial market innovation is an imperative for accelerating regional sustainable ambitions. With its diverse economies and significant vulnerability to climate change, ASEAN must leverage innovative financial instruments to bridge the substantial funding gap for green infrastructure and transition projects. The Role of Financial Innovation Financial innovation in ASEAN is transforming the landscape of sustainable development. Traditional reliance on bank financing is giving way to a more diversified approach, with market-based instruments like green bonds, sustainability-linked loans, and green sukuks gaining prominence. ✅ Green and Sustainability Bonds: Countries like Thailand and Singapore have emerged as leaders in the region's sustainable bond market. Thailand's issuance of sovereign sustainability bonds has successfully funded large-scale infrastructure projects, such as electric mass transit lines. Meanwhile, Singapore's ambition to become a green finance hub has driven exponential growth in green debt, particularly for green building projects. ✅ Sustainability-Linked Loans: These loans, which tie interest rates to a company's performance on ESG metrics, incentivize corporate sustainability transitions. This provides a flexible financing solution that directly rewards progress toward environmental and social goals. ✅ Regional Collaboration: The development of a common language through the ASEAN Taxonomy for Sustainable Finance is a pivotal step. This initiative provides clarity and confidence for investors by defining what constitutes a sustainable activity. By creating a unified framework, ASEAN can attract more international and regional investment, ensuring that capital is directed effectively toward the most impactful projects. Accelerating Regional Ambitions The true power of financial innovation lies in its ability to accelerate regional ambitions. By mobilizing both private and public capital, these markets can fund the transition away from fossil fuels, support the development of renewable energy, and build more resilient and sustainable urban centers. The integration of technology, such as Green FinTech, further enhances this process by improving data transparency, risk management, and the overall efficiency of sustainable investments. ASEAN can not only mitigate environmental risks but also create a new, greener pathway for economic growth and prosperity. #SustainableFinance #ASEAN #GreenFinance #FinancialInnovation #ESG #ClimateAction https://lnkd.in/gYqfbHwJ

West Africa is digitalising its trade systems. The majority of its cross-border traders are not in the design room. Women constitute an estimated 60-80% of informal cross-border traders in our region. Ghana Statistical Service's maiden Informal Cross-Border Trade Survey revealed that informal trade accounts for 61.2% of commerce with Togo, 55.7% with Côte d'Ivoire. Most of these traders are women moving perishable goods, livestock, and agricultural products across borders daily. Yet as Pan-African Payment & Settlement System - PAPSS payment systems, digital customs platforms, and AfCFTA e-documentation protocols take shape, women trader associations report minimal involvement in system design decisions. The Cross-Border Women Traders Association's call for a Women Traders Border ID Card reflects a fundamental gap: the people who understand border realities best are designing solutions from the outside. The stakes for getting digital systems right are considerable. Consider perishable goods spoilage: digital fast-tracking could reduce the delays that cause tomatoes and fish to rot at borders. But smartphone-only interfaces could exclude the majority who use basic mobile phones, leaving them in slower manual queues. Digital documentation creates paper trails and accountability for harassment and informal payments. Yet systems available only in English or French exclude traders who operate in Twi, Hausa, Yoruba, or Wolof. Digital transaction records could build the credit histories women traders lack for formal financing. Or platforms requiring smartphones and bank accounts could deepen financial exclusion instead. From our recent engagements with the Cross-Border Women Traders Association, several practical solutions have emerged: trader ID systems designed for basic mobile technology; multi-language interfaces including major West African languages; transaction logging that builds credit profiles even for small-value trades; formal advisory seats for women trader associations on national e-commerce committees and regional system design bodies; training programmes structured around market hours and women's operational contexts. The AfCFTA's projected continental market cannot reach its potential while excluding the majority of grassroots traders who actually move goods across borders. World Bank survey data shows over 40% of traders along West African corridors face bribery exposure. Digital systems designed with women's input could reduce this vulnerability. Systems designed without them risk automating existing inequities. The design choices being made now in Accra, Abuja, and Abidjan will shape whether digital trade narrows or widens the gender gap in regional commerce for years to come.

For decades, women were labelled “too risky” for formal finance. Then digital repayment data arrived… and proved the opposite. For a long time, the formal financial sector operated on the assumption that women borrowers are high risk. Not because the data said so, but because the lack of data was used to justify exclusion. But something interesting happened when digital finance expanded, when alternative credit scoring became possible, and when women finally had the chance to demonstrate their repayment behavior. The data told a different story. Women repay on time. Women borrow responsibly. Women are, in many programs, more reliable than male borrowers. What this exposed was never a “risk problem.” It was a measurement problem. A bias problem. A systems design problem that failed to collect the right data, and therefore failed to see women’s creditworthiness for what it truly is. Today, as more institutions adopt alternative credit scoring, we are finally expanding the understanding of what reliable borrowing looks like. And women are showing up as the strongest part of that picture. It’s a reminder that financial inclusion isn’t about making women fit the system. It’s about redesigning the system so it accurately sees and values them.

By being both an investor and a advocate for climate investments, one of the main paradox I struggle with is the Pipeline vs. Financing in Climate Deals one. Let me explain. There’s a growing dichotomy at the heart of climate finance: on one hand, we hear about a lack of bankable pipelines—high-quality, investable climate projects; on the other, we often point to a lack of financing as the main barrier. But what’s really missing—and what needs to happen between the two? 🔍 The Reality Check • A clear pipeline alone doesn’t guarantee capital—it needs standardized project structures, de-risking tools, matched timelines, and trusted verification. It needs offtaking agreements into place! And it also needs a way to navigate through all the mandates and actors that can provide financial resources. Not easy!! • Funding commitments fall short when projects lack financing readiness: technical feasibility, legal clarity, revenue certainty, ESG compliance, and clear impact metrics. COP30 is right around the corner. At SBCOP - Finance Working Group we are committed to bring a clear Action Agenda for Emerging & Developing Economies that could indeed bridge this gap. Some potential alternatives can include: 1. Pipeline Readiness Funds – Cover project preparation: feasibility, financial modeling, ESG review. 2. Risk Mitigation Schemes – Expand use of guarantees, insurance, blended capital to lower entry barriers. And that are adapted to the region reality! 3. Standardization & Market Infrastructure – Globally adopt model contracts, KPIs, certifications (like ICVCM, GCF standards). 4. Capacity Building – Fund local deal architects who can assemble bankable proposals. 5. Innovative Matchmaking Platforms – Use digital tools to connect projects with funders and match risk appetites transparently. 6. Anchor Deals by DFIs – Develop flagship projects that crowd in private finance and establish market precedents. COP30 must go beyond high-level pledges. We need a practical, resourced roadmap—not just more capital, but better-prepared pipelines and incentives that make private-sector commitments real. Emerging and developing economies deserve climate solutions that are not only financed, but truly achievable. Let’s connect the pipeline and the financing—and push for action at COP30. What ideas or models have you seen that close this gap? Let’s discuss! #SBCOP #COP30