Measuring Market Development
Despite significant funding for financial inclusion efforts worldwide—an estimated US$34 billion was committed as of 2015—approximately 2 billion adults remain excluded from the formal financial system. How do funders of financial inclusion programs know if and how development programs are making a difference?
Monitoring and evaluation—or measurement—is an increasingly prominent aspect of development programs. Funders are acutely conscious of their accountability to taxpayers and others for the money they invest in development programs, and implementing agencies are similarly aware of their accountability to funders. But measurement also has other important functions beyond accountability. It can help program teams and their partners navigate the uncertainties of program implementation, and it can help all stakeholders acquire valuable information and knowledge to inform new interventions and strategies.
While there is a growing consensus around the importance of the market systems approach to advancing financial inclusion, there is no comprehensive guidance on measurement strategies for these programs, nor is there consensus on key indicators of success. Measurement is challenging in complex and unpredictable program environments, but it is essential to obtaining a better understanding of what works and in which contexts.
This Handbook guides funders and their implementing partners on how to effectively measure results of financial inclusion programs that apply a systemic approach. It is intended primarily for measurement specialists who design and manage measurement systems for financial inclusion programs, oversee a portfolio of programs, or advise programs on how to measure results. The Handbook includes a self-assessment tool—a practical instrument for benchmarking and identifying areas for improvement. It does not provide step-by-step instructions but rather offers models and practices that can be easily adapted to the diverse settings in which financial inclusion funders and implementing agencies operate.
Together with CGAP’s Funder Guidelines, this Handbook will enable funders and implementers to better understand how change happens and how to play effective, catalytic roles in building inclusive financial systems that advance affordable, high-quality financial services for poor and underserved people.