Many donors and impact investors today are looking to support new innovations to maximize their development impact. But with fintechs emerging all the time — many touting their potential to improve the lives of low-income, excluded customers with unproven business models — it is important for funders to be wary of hype and conduct due diligence in making investments and designing development programs. This Focus Note presents a vision for how development funders can support fintech in EMDEs to enable innovative business models that provide greater impact for poor people. It offers guidance in three main areas: 1) Assessing and managing the impact potential of fintech investments; 2) Strategically funding to achieve impact and business potential; and 3) Influencing the market to support an ecosystem of fintechs that serve low-income customers.
With a strategic approach, development funders can expand fintech's impact on low-income communities and small businesses. See key findings from CGAP's fintech research at a glance in this infographic.
Are development funders providing catalytic support that helps build inclusive fintech markets? This slide deck analyzes a decade of funding flows into the fintech sector.