Kenya Banking Association (KBA) and the Mongolian Bankers Association (MBA), members of the IFC-supported Sustainable Banking Network (SBN), signed a Memorandum of Understanding (MOU) to advance environmental and social risk management and sustainable financing practices for the Kenyan and Mongolian banking sector. The signing ceremony took place during the sustainable finance related learning visit of the MBA representatives to Nairobi, facilitated and supported by the Dutch development bank FMO and IFC.
Mongolia and Kenya have both launched national policies or voluntary principles on sustainable finance. National sustainable finance guidelines and principles define how financial institutions can manage environmental and social risks and meet growing financing needs for green and inclusive economic growth. The Kenya-Mongolia cross border exchange is an example of peer knowledge exchange and learning visits conducted by SBN members.
As one of the founding members of SBN, the MBA has successfully positioned itself as a consensus builder, mobilizing the entire banking community to jointly develop, adopt and implement the Mongolian Sustainable Finance Principles. Both IFC and FMO have been supporting this initiative since 2013. Mongolian Bankers Association forged a strong public-private partnership with the Bank of Mongolia and Mongolian Ministry of Environment and Tourism and the Mongolian Sustainable Finance Principles have become the key component of the Mongolian Government’s Green Development Policy. The Kenya banking industry, through the KBA, adopted the Sustainable Finance Guiding Principles in March 2015. KBA, with the support of DEG and FMO, has developed a capacity building program for banks, including an innovative e-Learning platform. KBA is working with the industry to develop a green bonds market with the objective of having individual bank issuance. “We plan to share and learn best practices on the implementation of sustainable finance principles, developing our secretariats as centers for knowledge sharing in our respective regions,” said Tumurkhuu Davaakhuu, Vice President of the Mongolia Banking Association.
Knowledge sharing topics will include work on capacity development, knowledge sharing, directives, policy documents and toolkits, as well as reporting, monitoring and evaluation sustainable finance performance. Mongolia and Kenya will also discuss the Green Bond related subjects that are being actively pursued by the both associations.
“At KBA, we are pleased to see the tremendous interest and support from FMO and IFC in advancing Sustainable Finance practices between our two associations. We look forward to the learning partnership” said Habil Olaka, CEO of KBA.
“FMO is proud to be a founding partner of the sustainable finance initiatives of both the MBA in Mongolia and KBA in Kenya. Over the past years, we have seen the banking sector of both countries develop and embrace sustainable finance principles. The strong local ownership demonstrated by the KBA and MBA is the way forward in continuous advancement of such initiatives. We believe connecting both partners is of great value to advance global cooperation and further develop a sustainable banking sector.” said Huib-Jan de Ruijter, Director Financial Institutions at FMO, The Netherlands.
“IFC is proud to connect Mongolian and Kenyan banks, as part of the wider SBN network, to share experience in this shared journey toward sustainable finance,” said Tuyen D. Nguyen, IFC Resident Representative in Mongolia. “Higher standards of environmental and social risk management by financial institutions are a powerful way to manage concrete business risks, increase market trust, and attract investment, especially toward green financing.”