New Trends in Global Funding for Financial Inclusion

What direction is funding for financial inclusion headed? The results are in from the annual CGAP and MIX Cross-Border Funder Survey. In addition to showing a $3 billion increase in commitments to financial inclusion across the 54 funders surveyed, one of the main takeaways this year is that the world’s major funders are increasingly embedding financial inclusion within projects in different sectors — from education to health — and integrating it throughout their organizations.

What does greater integration mean for financial inclusion? Integrating financial inclusion into other sectors could prove to be a positive trend, since it signals that funders are thinking more deeply about how to leverage financial inclusion to help poor people reach their goals and meet their needs. At the same time, it could risk diluting funder’s focus on building markets for financial services that work for poor people.

Likewise, the increase in funding presents both opportunities and risks. Many emerging economies are seeing significant amounts of private sector money flowing into their financial services industries. In those contexts, donors and development finance institutions risk crowding out private capital and distorting markets. Further, some of us at CGAP would argue that the most effective financial inclusion interventions funders can support — things like market facilitation, research and policy development, and capacity building — are not necessarily the most expensive.

Below are some additional trends revealed in the survey that are influencing financial inclusion work around the world.

Funders report a stable focus on financial inclusion but evolving strategies.

The past two years marked a re-orientation period for international funders’ financial inclusion agenda, with at least eight major funders (who together represent about a third of total commitments) undergoing a strategy refresh. At the same time, funders reported that their organizations increasingly view financial inclusion as an enabler of other development objectives and not as a standalone goal. We hypothesize that these trends are related. As funders embed or integrate financial inclusion within projects that target multiple goals, they are also reconsidering how financial inclusion fits into their overall strategy. Reporting to the survey is never an easy task for funders, but this year many funders said it was especially difficult to isolate the exact amount of funding within each project that went to financial inclusion, since it was often a component within a broader financial sector, education, health or energy program.

Funders are slowly — but noticeably — stepping up their efforts to strengthen the market infrastructure and increase the financial capabilities of clients.

Even though financing to financial service providers dominates other funding purposes, funders seem to be broadening their scope across other levels of the financial system, resulting in a small but noticeable growth in market infrastructure and client-level interventions. These types of projects are typically three to four times smaller than financing projects but can have a significant impact on improving financial inclusion.

Funders are sharpening their focus on Sub-Saharan Africa and least developed countries.

In previous surveys, funders consistently ranked Sub-Saharan Africa as a priority region for the following three to five years. This year’s survey data provide evidence that funders have indeed prioritized the region, which hosts the largest number of projects (693 in 2015). Seventy percent of least developed countries are located in Africa, and we can see a clear increase in the percentage of overall funding committed to these countries (13 percent in 2009 versus 16 percent in 2015). Further, half of the growth in funding between 2013 and 2015 came from commitments to least developed countries.

Funders are targeting a greater diversity of recipient types.

Funding for financial inclusion typically goes directly to financial service providers or is channeled to providers through some type of intermediary, such as a microfinance investment vehicle. Governments are another common recipient, as policy and regulation are key enablers of increasing access to affordable and responsibly provided financial services (and governments often serve as an intermediary to channel funding to other entities).

But we noticed this year that funders are increasing their commitments to recipients beyond these entities. For example, at least $200 million targets actors in the digital finance ecosystem, with $130 million going directly to mobile network operators or mobile money providers, and the rest spread among digital payments platforms, money transfer services, and fintech firms. In addition, nearly $170 million goes to market facilitators, which include members of the Financial Sector Deepening network in Sub-Saharan Africa.

Do these trends indicate that the financial inclusion community is moving in the right direction? If you are interested in learning more about the survey, please take a look at the brief or explore the dataset listed below. And be sure to look out for upcoming blogs that delve deeper into regional and thematic trends.



These guidelines are intended to provide guidance for funders promoting financial inclusion or pro-poor financial services markets as part of their development mandate. The target audience includes multilateral and bilateral donors, development finance institutions, and foundations.

This Brief highlights findings from CGAP’s annual Cross-Border Funder Survey. New commitments in 2015 increased total funding for financial inclusion to $34 billion. Between 2013 and 2015, about one-third of funders decreased their portfolios, while the remainder maintained or increased their commitments.

This year’s Survey reports data from 54 funders who account for 74% of this year’s global estimate of total international funding for financial inclusion. It outlines financial instruments used, purpose of funding, type of funding, geographic allocation and more.
Sub-topics: Funding Trends

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