Fragility and inclusive finance

Fragile countries are behind—and falling further behind—their nonfragile peers in measures of poverty and financial inclusion. By 2025, 25 percent of the world’s population and 72 percent of the world’s lowest income people were living in countries experiencing high levels of fragility (OECD 2025).

Low-income people in fragile countries have lower financial and digital literacy, are more risk averse, and invest less than their nonfragile peers. Women are more likely to lose their livelihoods, experience displacement, and have education interrupted during crises.

Inclusive finance plays a critical role in building resilience for low-income people living in fragile contexts. Research shows that products like savings, insurance, and payments can help smooth consumption and allow users to better respond to crises.  

But there are challenges. Financial services in fragile contexts often fail to meet customers' needs – formal financial products are less accessible, more expensive, and less trusted as compared to those in less fragile contexts. Financial service providers face a 'triple threat' of reduced revenues, higher costs, and increased risk, limiting investment precisely where it's most needed. Policymakers, overwhelmed by concurrent crises, often lack the capacity to drive long-term strategies.  

Development funders require different approaches to address these challenges. Building resilient financial ecosystems in fragile contexts requires recognizing the competing priorities of humanitarian and development needs and the difficulty of maintaining support through recurring crises.  

CGAP is working to better understand the role inclusive financial systems can play in fragile contexts. We are exploring the approaches development funders can leverage in some of the world's most challenging environments to build foundations for a better future, supporting financial resilience for the most vulnerable.