Why don’t low-income people access and use financial services? Why are financial services providers not adequately serving low-income people? Why are supporting functions, rules, and norms that shape financial services markets absent or dysfunctional? What can funders do to ensure they are supporting appropriate market interventions with long-lasting change?
CGAP advocates a systemic approach to financial inclusion. This approach considers all aspects of a market system and breaks down barriers to financial inclusion that poor people face by nudging market actors to take up missing or weak functions in the market, which lead to weak markets that limit demand and supply and, thereby, exclude the poor from financial services.
A systemic approach aims to catalyze systemic change that is significant in scale and sustainable and that comes with built-in momentum for replication and adaption, beyond the timeframe of a development program. Applying this approach requires funders to think of their role not as providers of missing services but, rather, as facilitators who incentivize and enable market actors to provide these services by performing market functions more effectively.
Explore CGAP's guidance on how to apply a systemic approach in funders programming.