Climate change worries a large part of the world’s population, particularly those people and companies that are committed to a better future. That is why at Inswitch we devise solutions that can cooperate with the cause. We always consider that E-money does not only contribute to financial inclusion but also collaborates with ecology.
At GSMA they share the same vision. Mariana Lopez, Senior Advocacy Manager for the GSMA Mobile Money Programme, wrote an interesting article, which explains how the inclusive green finance policies can mitigate and build resilience to climate change.
According to this article, in a survey made by AFI (Alliance for Financial Inclusion) “75% of the interviewed members have already linked climate change and financial inclusion in their national financial sector strategies.”
Within this topic, the concept of Green Financial Inclusion was formed, which is defined as “a new area at the intersection of climate change and financial inclusion, which focuses on climate change as one of the greatest inhibitors of financial stability, poverty alleviation and inclusive economic growth. (…)”
How can mobile money support Green Financial Inclusion? As Mariana Lopez explains in her article “Mobile money builds resilience to climate change by enabling services such as savings, credit, insurance, remittances and government transfer that can provide vital support for those managing new environmental realities.”
It also mentions the Groundswell report made by the World Bank in 2018, which states that climate change should displace as many as 143 million persons by 2050. “Mobile money allows marginalized populations to receive cash transfers after disasters and provides a fast targeted and cost-efficient channel supporting affected communities” highlights the author.
Another way in which mobile money provides support to Green Financial Inclusion is by “providing access to clean and affordable energy and helping to reduce carbon emissions.”
Our MTS platform covers some services mentioned in this article, such as microinsurance, which “can address the lack of financial protection that smallholder farmers need to deal with unpredictable weather patterns” and the Government-to-person (G2P) payments, which “have been successfully used to reach vulnerable populations in the aftermath of extreme climate events and to disburse transfer to individuals helping to clear roads, buildings, schools and hospitals.”
Other services highlighted in the article in a general manner and that our platform also features, are mobile pay-as-you-go (PAYG) model, which is “helping householders replace dirty, non-renewable energy sources, such as kerosene, charcoal and wood, and enabling low-income consumers to access energy-powered assets”, loans “that enhance resilience”, and remittances and international remittances, which help families affected by natural disasters.
Mobile money has fueled financial inclusion, making it a payment platform, allowing households and businesses to invest in environmentally friendly assets assets and combat the combat the effects of climate change. The challenge from now on, as explained by Mariana López, is to know that, “seizing the power of mobile money for climate action calls for an increased understanding that successful solutions to drive financial inclusion can be refined and strengthened to combat climate change and its impact”.