It is time for DFIs to adopt an alternative approach to financial inclusion that prioritizes needed market changes. A shift to a market systems approach addresses this need and requires that DFIs carefully analyze each market to determine the key gaps, underlying causes, critical actors, and theory of change for bringing about sustainable market development.
SmartAid measures whether funding agencies are set up to support microfinance effectively. It is the first index of its kind that promotes transparent external assessments of funders’ management systems. SmartAid helps funders understand how their internal management systems, policies, procedures, and incentives affect their work in microfinance.