Marcus Jenal presents guiding principles for changing the fact that monitoring frameworks are still predominantly designed for accountability towards funders rather than as a management and learning tool for the programs themselves.
A market systems approach to financial inclusion seeks to identify the root causes that prevent low-income people from accessing and using financial services. The program diagnostic process should be designed and implemented through a systems lens.
Building a financial market that serves the poor requires more than supporting institutions. It also requires coordinating underlying elements - such as educating consumers, drafting appropriate laws, and building capacity in organizations.
A market systems development approach to financial inclusion looks holistically at the delivery and use of financial services in order to better understand and address the constraints that prevent poor and low-income people from fully participating in financial services markets.
No single methodology is likely to respond to all the measurement challenges that exist. However, a combination of methods and mindsets may collectively help provide a credible narrative for how a financial market changed and why.
How can aid agencies begin to ‘take’ market development thinking and practice into their efforts to enhance financial services for poor people? Drawing from wider experience, here are five basic starting points to consider.
With increasing scrutiny of aid budgets in donor countries, the pressures to prove impact of development programs are higher than ever before. It is relatively easy to assess impacts in a backward-looking fashion when there is already some record of progress, but measurement challenges are more daunting at the start of a program, when impact assessment needs to be forward-looking.
Being able to measure and demonstrate progress are critical issues as taxpayers and other funders of donors and DFIs require explanations and justifications of the use of their limited resources. A handful of donors are starting to experiment with different tools for measuring progress in agricultural and other non-financial markets. It is difficult work, especially when attempting to measure attributable and sustainable changes to a market system.