Will fostering financial inclusion ease the transition to a low-carbon economy?
Financial inclusion has made significant inroads in many countries, including Fiji, where today over 80 percent of adults have access to financial products and services. Rigorous research shows that providing access to formal financial services helps the poor smooth consumption when they face unexpected setbacks. However, while green finance and sustainable finance have become established concepts, the connection between financial inclusion and climate change has not been sufficiently explored.
The purpose of this case study is to show the important link between financial inclusion and climate change and to help build a body of evidence of the actions financial regulators are taking to address the pressing issues of climate change mitigation and adaptation for those at the bottom of the pyramid. It examines the early work of the Reserve Bank of Fiji (RBF) to enact policies that will transition Fiji’s financial sector to a green economy and help the population cope with the financial losses of climate change and adapt to new livelihoods and environmental realities.