2014 Saw $31 Billion in International Funding for Financial Inclusion
International Funding for Financial Inclusion Remains Stable at $31 Billion, Finds CGAP
WASHINGTON, D.C., January 19, 2016 – According to a survey conducted by CGAP (Consultative Group to Assist the Poor) and The MIX (The Microfinance Information Exchange), international funders committed $31 billion towards financial inclusion projects in 2014, despite competing challenges facing the international development community - including climate change, mass migration, and fragile states.
The 2,235 global projects reported in the survey supported the growth of financial service providers, built capacity at financial institutions, expanded market infrastructure, addressed policy issues, and improved the financial capabilities of low-income people.
Conducted annually since 2008, The CGAP Funders Survey, in partnership with The MIX (Microfinance Information Exchange), is the most comprehensive source of analysis on international funding for microfinance and financial inclusion. The survey tracks the quantity, purpose, and destination of international commitments to financial inclusion annually and explains how funders are working to bring more of the world’s 2 billion ‘unbanked’ into the formal financial system.
- 72% of financial inclusion funding came from public sources (development agencies, bilateral institutions and multilateral institutions), while 28% came from private sources (foundations, institutional investors and other donors).
- Eastern Europe and Central Asia ($6.28 billion) and South Asia ($2.98 billion) received the most funding.
- The Middle East and North Africa was the only region to see an increase in international funding in 2014. Funding increased by 12% in this region.
- The largest number of projects (553) were executed in Sub-Saharan Africa. Digital finance is a central theme for these projects, and grants make up one-third of the $2.87 billion committed to this region.
- The majority of international funding commitments take the form of debt ($11.84 billion) and are most commonly used to finance the portfolios of financial service providers ($9 billion).
- 97 of the 2,235 projects in 2014 aimed to expand digital financial services. Fifty-one of these projects target Sub-Saharan Africa. These digital finance projects focus on improving operations, strengthening regulation and supervision, and supporting information and transparency.
"Even though growth in financial inclusion funding slowed in 2014, most funders reported to us that they expect to maintain or increase their funding commitments in the future,” says Matthew Soursourian, Financial Sector Analyst at CGAP and report co-author.
In 2015, CGAP and MIX analyzed data from 23 international funders, whose funding represents 66% of the global estimate. The global estimate is calculated on data from this sample as well as publicly available information from Symbiotics Surveys. The survey does not, however, collect data on local or in-country funding commitments.
CGAP is an independent think tank that works to empower poor people to capture opportunities and build resilience through financial services. We test, learn and develop innovative solutions through practical research and active engagement with our partners on building responsible and inclusive financial systems that help move people out of poverty, protect their gains and advance global development goals. Housed at the World Bank, CGAP is supported by over 30 leading development organizations committed to making financial services meet the needs of poor people.
About Microfinance Information Exchange
MIX promotes responsible financial services for underserved communities through data analytics and market insight. We do this through two decision support platforms, MIX Market and FINclusion Lab. As basic infrastructure for responsible and inclusive markets, these platforms provide a necessary ecosystem to enable and inspire coordinated investment, effective policy, and positive social outcomes for the financially underserved. Incorporated in 2002, MIX is a non-profit organization headquartered in Washington, DC with regional offices in Africa, Asia, Europe, and Latin America. Our efforts are strengthened through our collaboration with the following global partners: Bill & Melinda Gates Foundation, CGAP, The MasterCard Foundation, IFAD, Michael & Susan Dell Foundation, DFID, and Citi Foundation. MIX leverages an ideal solution model to ensure the sustainability and public good of our platforms. Read more: http://www.themix.org