© Ministry of Foreign and European Affairs of Luxembourg
Signing of the first programme of the 4th ICP, the ‘Support project for the development of inclusive and sustainable finance in Niger’, by Mr Franz Fayot, Minister of Development Cooperation and Humanitarian Affairs of Luxembourg, and Mr Ouhoumoudou Mahamadou, Prime Minister of Niger, in the presence of Laura Foschi, Executive Director of ADA (not in picture)

ADA helps to broaden access to financial services in Niger

For the first time, ADA has been given a major role in the implementation of a national programme of the Directorate of Development Cooperation and Humanitarian Affairs of the Luxembourgish government (Luxembourg’s development cooperation). 
While Luxembourg has been supporting Niger for over 30 years, the partnership between the two countries was recently strengthened with the signing of a fourth development cooperation framework (indicative cooperation programme, ICP) which will run from 2022 to 2026 with a total budget of 145 million Euros. 

"For the first time, inclusive finance constitutes an area of intervention in its own right in an ICP. ADA’s successful implementation of the preceding financial inclusion project in Niger over the last two years has further increased the trust of Luxembourg’s development cooperation in our expertise. I am proud and honoured to be mandated with the implementation of this flagship project.” 
Laura Foschi, Executive Director of ADA

Inclusive finance as a key development tool 

Inclusive finance is increasingly recognised as one of the main levers for socio-economic development and poverty reduction and it is therefore gaining prominence in all areas of intervention of Luxembourg’s development cooperation.
It therefore comes as no surprise that one of the five key programmes under the ICP targets the strengthening of the inclusive finance sector in Niger. This is the largest inclusive finance programme ever signed with a partner country of Luxembourg’s development cooperation, with a budget of 15 million Euros (9 825 000 000 FCFA). Due to its size and importance, inclusive finance is treated as a key ICP programme in its own right instead of being grouped in with other projects – incidentally, it was also the first programme to be signed.

Close collaboration with LuxDev

The inclusive finance programme will be implemented by ADA in cooperation with the Luxembourg agency for development cooperation, LuxDev. Both organisations have been jointly mandated to improve access to financial services for vulnerable segments of the population such as women and young people, as well as for actors in the agricultural sector. Financial services such as loans and savings can boost the professional integration and productivity of these target groups and facilitate the creation of sustainable jobs.
This mandate will be an opportunity for ADA to deepen its longstanding collaboration with LuxDev. In practice, ADA will provide technical assistance to the Nigerien public and private institutions in charge of developing inclusive and agricultural finance, while LuxDev will lead the implementation of all other components of the ICP.

The role of ADA

ADA’s technical assistance will focus on three areas:

• Supporting the Nigerien government in strengthening viable microfinance institutions (MFIs) and in restructuring deficient institutions with the aim of reorganising and professionalising the inclusive finance sector. 
• Designing and implementing procedures and supervisory frameworks as well as establishing partnerships with technical support structures and financial institutions to enable the Nigerien government to put in place a funding facility for MFIs.
• Tailoring financial products to the needs of actors in agricultural value chains, young people and women wishing to become self-employed as well as designing specific loan products for improving access to decent housing and clean water for vulnerable segments of the population. These services will be provided by MFIs which will be jointly selected with LuxDev. In this context, ADA will apply innovative risk management solutions such as micro-insurance via mobile phones, financing based on contracts between value chain actors, linking actors through platforms, etc.

 
While the immediate aim of the five-year programme is to facilitate access to financial services for young people, women and small enterprises by professionalised MFIs, the long-term objective of Luxembourg’s development cooperation is to support the autonomous development of the inclusive finance sector in Niger. Ultimately, local MFIs will be enabled to provide financial services to vulnerable and rural segments of the population in a sustainable manner without external support.