IFC, MAS, and World Economic Forum join forces to enhance digital financial inclusion in developing markets
In a significant move to boost digital inclusivity in emerging and developing economies, the International Finance Corporation (IFC), the Monetary Authority of Singapore (MAS), and the World Economic Forum (WEF) have inked an MoU. This tripartite partnership aims to reduce inequalities through enhanced digital access in financial services.
The collaboration focuses on mobilizing financing to make digital services more accessible and affordable for underserved communities and MSMEs. One of the primary goals is to create and promote guidelines for digital financial inclusion financing instruments.
IFC, leveraging its vast network in financial institutions, will spearhead the development of these guidelines, which are expected to cover a range of topics from eligible digital financial inclusion products to reporting mechanisms. MAS plans to align these efforts with its existing initiatives, such as SME Financial Empowerment and Financial Transparency Corridor Programmes, to further enhance financing access for MSMEs in emerging markets. Meanwhile, WEF will utilize its extensive international network of government and private sector partners to promote and disseminate these innovative solutions.
“The challenge to improve digital inclusion for billions of people in emerging and developing markets is significant, and traditional financing mechanisms alone cannot address this challenge,” said Allen Forlemu, Regional Industry Director, Financial Institutions Group, Asia & Pacific at IFC. “We need innovative financial instruments and guidelines to mobilise the trillions of dollars needed to improve digital inclusion. IFC is honoured to partner with MAS and the World Economic Forum to help address this challenge, which will ultimately benefit underserved people and businesses in countries that need it most.”
Sopnendu Mohanty, Chief FinTech Officer at MAS, highlighted the partnership’s potential to enable previously underserved individuals and MSMEs to access digital services affordably and consistently. He said: “MAS is proud to partner the International Finance Corporation and the World Economic Forum to collaborate in research for digital inclusion, which could allow previously underserved individuals and MSMEs to access digital information, services, and products consistently and affordably. Through this partnership, we hope to promote developments in emerging markets, support quality education, and reduce inequalities,”
The Monetary Authority of Singapore (MAS) has announced the development of a Minimum Viable Product (MVP) to assist banks in utilizing Artificial Intelligence (AI) for issuing SustainabilityLinked Loans (SLLs) in the real estate sector. Developed by Project NovA! consortium, the MVP addresses key challenges banks face in extending SLLs, such as setting accurate Sustainability Performance Targets (SPTs), combating greenwashing, and reducing manual errors in processing. The consortium has also published a whitepaper documenting the MVP’s methodology.
One of the MVP’s core features is its ability to set performance targets for SLLs through peer and industry benchmarking, using data from government sources for property-specific comparisons. This assists banks in setting realistic KPIs and SPTs, thereby enhancing the accuracy of sustainability assessments.
Additionally, the MVP incorporates a monitoring system using at-source data, such as building energy consumption, to compare borrowers’ sustainability performance with agreed SPTs. This real-time monitoring helps in identifying discrepancies and maintaining t he intended impact of SLLs.
Another notable feature is the Autonomous Documentation Insights Engine ( ADIE), which utilizes Natural Language Processing to extract sustainability insights from diverse sources, shifting away fr om manual document processing. This innovation allows for more informed decision-making based on comprehensive data.
The next phase of the project will see MAS collaborating with the Building and Construction Authority (BCA) to integrate BCA’s Super Low Energy Building (SLEB) database, enabling Nov A! to access country-wide data on green buildings.
This integration aims to enhance real-time monitoring of SPTs and accelerate green financing within the real estate sector. Furthermore, NovA!’s AI capabilities will be extended to support sustainable financing in other sectors like power and manufacturing industries.
Sopnendu Mohanty, Chief FinTech Officer at MAS, said: “The collaboration between MAS & BCA marks a transformative phase in green finance and sustainable building, accelerating our industry towards achieving their net-zero targets. NovA! creates a transparent and effective environment that combats greenwashing and directs finances towards truly sustainable projects.”