Dhaka, Bangladesh (BBN) – There are huge opportunities of financing SDGs if the central banks could play innovative broader developmental role as has been possible in Bangladesh, Atiur Rahman, former Governor of Bangladesh Bank (BB), said in Dubai on Wednesday.
Dr. Rahman was speaking at a Luncheon Meeting of the CEOs (chief executive officers) organized by UNEP Finance Initiative where UNEP Executive Director Erik Solheim was also present, according to a message received in the capital Dhaka from Dubai.
Drawing from his seven years of deeper engagement with the financial services industry as its regulator, the former governor urged the global community to help central banks transform from within to help mobilize the finance needed to achieve the SDGS through the banks and other financial institutions.
“The central banks indeed can create mechanisms by which both financial institutions and economic actors will feel incentivized to go for green growth solutions,” he explained.
Of course, the incentives will have to be matched by the institutional capacity to introduce green growth practices, according to the former governor.
“Banks can certainly play positive role for sustainable development as they provide finance to economic actors who can be encouraged to go for green technology and practices,” he noted.
Dr. Rahman also said banks are also a great source of information as they know their clients at the micro level. “If properly tapped by the central bank this information can be strategic input to the policy advice for triggering green growth. Being knowledge brokers the banks can also inspire potential entrepreneurs to go green.”
The central bank of Bangladesh was able to take this strategy in motivating the banks to unlock the private capital through leveraging a small proportion of green refinance to the banks.
The central bank also partnered with The World Bank and Asian Development Bank (ADB) to create special green fund in addition to its own refinance schemes for the small and medium entrepreneurs to go for medium and long term green transformation using banks as intermediaries.
“Both central bank and other banks went for innovative partnership with MFIs to leverage loans to farmers and SMEs with a purpose,” the former governor observed.
The central bank, the most credible public institution, could ingrain social and environmental responsibility in the minds of the banks to go green.
“It could easily connect regulatory actions with policies for sustainability to push innovations for shaping the broader financial ecology for green growth” he explained.
Dr. Rahman also called upon the CEOs for working together and helps both savers and investors make value-based decision for the greater planetary growth.
Participants appreciated the central bank of Bangladesh for gains made towards green growth.