Boat Dealers in Aswan. Photo by Mustafa Shorbaji, 2018 CGAP Photo Contest Photo by Mustafa Shorbaji, 2018 CGAP Photo Contest

Regulation for Inclusive Digital Finance

Regulatory sandboxes can play an important role in fostering the innovation needed for overcoming the barriers to financial inclusion that keep poor and excluded customers marginalized from the formal financial system. Sandboxes allow regulators to base their regulatory response to innovations on the results of live experiments. In frontier cases, this helps regulators to make faster and better informed decisions on how to appropriately regulate (and supervise) new services and providers reaching the marketplace.

Not all jurisdictions need a sandbox. Their suitability depends upon the regulatory objectives, the flexibility of the existing regulatory regime, the resources and capacity of the regulator, and the types of innovations emerging in the market. Under certain circumstances, they have potential to speed the regulatory adaptation towards an enabling framework in support of inclusive, innovative finance.

When should financial regulators use a sandbox?

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How to Build a Regulatory Sandbox: A Practical Guide for Policy Makers

When is a regulatory sandbox the best method for financial regulators to test innovative products and services? And how can they use a sandbox for advancing financial inclusion? CGAP’s new guide leads regulators step by step through the decision-making process. It provides strategies for building and running a successful sandbox, and offers alternatives to consider. The guide is practical, specific, illustrated by country examples and complemented with work templates.

Explore firms innovating in regulatory sandboxes

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CGAP has collated data on a number of companies operating in and graduating from selected sandboxes. On this map, users can explore those firms, their technology and how they are contributing to financial inclusion. The map is interactive and includes 134 firms from 16 different sandboxes.

What have we learned so far?

Craft Africa by Mohammad Saiful Islam

In this blog series, CGAP takes a critical look at the concept of a regulatory sandbox and how it has evolved in different parts of the world, and explores the practical aspects of setting up and implementing a regulatory sandbox.

Additional resources


Regulatory Sandboxes: A Practical Guide for Policy Makers

A visual guide that walks you through the key decision points on whether to build a regulatory sandbox for financial inclusion.


Regulatory Sandboxes and Financial Inclusion

A regulatory sandbox is a framework set up by a financial sector regulator to allow small-scale, live testing of innovations by private firms in a controlled environment under the regulator’s supervision. This 2017 paper summarizes early insights concerning the concept. It explains key design elements, key benefits and associated risks, and hypothesizes about the use of sandboxes in advancing financial inclusion.


Regulatory Sandbox Global Repository

This global repository on sandbox resources is compiled from publicly available data around the world and features country policy documents, press releases, regulatory guidelines and reports.


Why a Regulatory Sandbox? Insights from Regulators in Kenya, Morocco and Philippines

In this 2020 webinar, the following panel of experts discussed how to implement a regulatory sandbox or whether to choose an alternate tool. Three regulators provided insights from their practical experiences with new approaches to managing financial innovation.

Frequently asked questions