The total issuance of green bonds and sukuk related to sustainable activities amounted to $5.5B
Arab countries are celebrating the Arab Day for Financial Inclusion on April 27, 2023. With a focus on increasing financial inclusion to support efforts addressing climate change repercussions, the event highlights the growing importance of sustainable green finance.
The Arab Day for Financial Inclusion is celebrated on April 27 of each year under the theme of “Increasing Financial Inclusion to Support the Efforts to Address the Climate Change Repercussions”. The Council of Arab Central Banks and Monetary Authorities’ Governors has called for the celebration of this day to increase access to financial services and to support inclusive and sustainable economic development, address unemployment challenges, and achieve equality in the Arab region.
Financial inclusion is crucial in enabling financial sector customers to deal with risks associated with climate changes and enhancing their ability to recover from the climate change effects. It also contributes to inclusive and sustainable development and leads to soundness and resilience of the financial sector. The Arab central banks and monetary authorities are keen to support the efforts of the international community in enhancing financing that considers climate considerations and sustainable development in general.
The Arab Monetary Fund (AMF) pays great attention to priority financial sector issues, especially in terms of facing the climate change repercussions and green and sustainable finance, with the aim of supporting the efforts to achieve inclusive and sustainable development and financial stability in the Arab countries. Arab central banks and monetary authorities have adopted the guiding principles issued by the AMF for “Central Banks to Address the Impact of Natural Disasters and Climate Change on Banking System and Financial Stability”.
According to the AMF estimates, the issuances of the Arab countries of green bonds and sukuk related to sustainable activities, whether sovereign or private sector, amounted to $5.5 billion in 2022. The Arab Financial Inclusion Task Force is interested in the issues related to climate change and limiting its negative effects, through developing policies and procedures related to enhancing financial inclusion and upgrading its indicators.
Although there has been progress in improving access to financial services in the Arab communities, there are still great opportunities, especially for financial and banking institutions, to improve access to financial services in the Arab communities, target the financially excluded groups, and integrate the informal sector into the national economy by adopting appropriate policies.
The Director General Chairman of the Board of the Arab Monetary Fund, H.E. Dr. Abdulrahman Al-Hamidy, has stressed the importance and the role of financial inclusion in addressing the economic challenges that affect economic growth, by mobilizing resources to increase savings and investments and create new job opportunities.
To celebrate the Arab Day for Financial Inclusion, Arab central banks and monetary authorities are looking forward to the participation of the other supervisory authorities, such as ministries of finance, capital market authorities, insurance supervisory authorities, banking associations, and all other financial institutions.
In conclusion, financial inclusion plays a vital role in addressing the challenges of climate change, and it is important for the financial and banking sector to take initiatives to enhance its ability to deal with climate-related shocks, raise awareness of climate change repercussions, and deepen consumer confidence in financial institutions to limit the negative effects of these changes in the Arab region. Celebrating the Arab Day for Financial Inclusion is an opportunity to expand the scope of community participation and implement activities that enhance knowledge of climate change repercussions and green finance issues.