Blog

Who loses out in the global push for individual financial inclusion?
By Karina Avakyan, Floor Knoote, Sofia Ortega, Lia van Broekhoven, Fulco van Deventer & Sangeeta Goswami

‘The focus of these debates, however, has been the effect of de-risking on the micro level and the individual consumer, and not on the organizations which are crucial to supporting these inclusion processes. While we see a global push for financial inclusion at the individual level on the one hand, whole groups are at risk of falling out of the system on the other, a veritable “hole in the bucket” which needs to be plugged with some urgency. We would like to draw attention to these organizations, as a growing body of evidence shows that the non-profit sector is bearing the brunt of de-risking decisions.’

Read the full blog here.

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Derisking and Civil Society: Drivers, Impact and Possible Solutions (September 2017)

Sangeeta Goswami, Human Security Collective, writes: ‘Derisking is defined as the practice of financial institutions exiting relationships with and closing the accounts of clients considered ‘high risk’. Nonprofit organisations (NPOs), unfortunately, seem to fall within this ambit – along with certain others such as money-service businesses, foreign embassies and correspondent banks. This has led to NPOs around the world being unable to carry out their mandate, affecting aid and relief, as well as the campaigning for political and social change. It has also, in some cases, led to funds being transferred through unregulated channels. Why is this happening? Why is banking nonprofits considered risky? And what can be done about it?’ Read the full blog here .

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FATF and India


Can Indian NGOs Bank on Banks? 
(March 2016)

Seema Nair writes about the impact on Indian civil society of the Indian government’s implementation of counter-terrorism financing standards, including the introduction of several clauses not related to curtailing funding to terrorist organisations.  Some of the more problematic among these include preventing organisations of a ‘political nature’ from receiving foreign funding without an adequate definition of  ‘political activity’ thus allowing investigating officials to define any social mobilisation as political activity, and prohibiting the acceptance and utilisation of foreign contribution for activities that are detrimental to the ‘national interest’, with ‘national interest’ too remaining undefined in the present law. Additionally, Nair writes, there is the growing issue of bank de-risking, resulting in delays or denials of money transfers, affecting  NPOs’ access to  financial services and, in turn, their operating space.

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FATF and Mexico

FATF and Mexico: how anti-money-laundering legislation
has weakened the human rights response to the war on drugs (September 2015)

Poonam Joshi, the Director of the London Office for The Fund for Global Human Rights writes about how Mexico, in implementing the FATF’s money laundering directives to tackle the drugs trade, has triggered the repression of human rights groups and the closing down of civil society space. The resources non profits need for compliance are enormous and often unrealistic. The solution to the often untenable situation for  non profits lies, Joshi writes,  in raising more awareness around the issues on the ground , and in direct advocacy with the FATF, campaigning for a risk-based approach.

 

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