Market Facilitation to Advance Financial Inclusion

17 January 2017
From close to zero rural banks involved in cash-based microlending in the late 1990s, 187 rural banks had become involved in microfinance by the end of the USAID programs in 2012.
CGAP’s guidelines for funders encourage funders to adopt a systemic approach in their financial inclusion programs. Systemic approaches have been applied in various sectors, notably agriculture and enterprise development, for many years. In financial inclusion, systemic approaches are still rare, and there is a limited body of knowledge on how to operationalize a systemic approach in this sector.
 
This case study aims to contribute toward closing this knowledge gap, and shares an example of how a funder stimulated systemic change. It reviews how USAID, through two programs and in partnership with a series of market actors, helped change the microfinance market dynamics in the Philippines—from a specialized activity with limited outreach and highly dependent on subsidized credit, to a more inclusive and robust market-driven segment of the financial sector.
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