Responsible Finance Forum

Corporate Governance for Financial Inclusion – Managing Current Issues, Crisis and Change

Matthew Brown, Lory Camba Opem, Stephan Hartenstein, David Kruijff and Ira Lieberman
30 March 2018

IFC’s report reflects on over 20 years of experience in the evolution of microfinance and the potential for responsible digital financial inclusion through a comprehensive analysis of evolving risks and opportunities facing the financial inclusion industry today –for consumers or customers, their providers and broader market ecosystems.  The report entitled, Corporate Governance for Financial Inclusion — Insights for Boards of Microfinance Institutions: Managing Current Issues, Crisis, and Change, presents a renewed outlook for boards serving in institutions that are navigating through a rapidly changing world.

Based on interviews and first-hand experiences of IFC board directors globally, the report culls selected case studies and practical lessons learned. Attention is given to core areas of board responsibility, including: risk and crisis management; change management, such as institutional and digital transformation; the importance of the customer, including the potential role of investors in catalyzing private sector investments or new business models in responsible digital financial inclusionTo effectively guide their institutions, boards will need to deepen their traditional tools, refine existing or introduce new ones to achieve sustainable and prudent growth. The report is a call to action for public-private sector collaboration and the role of the G20 Global Partnership for Financial Inclusion (G20 GPFI) to help foster digital innovation, promote consumer protection and broader financial markets stability.

The report provides critical ingredients to achieve the World Bank Group’s Universal Financial Access by 2020 and its broader contribution towards the United Nations’ Sustainable Development Goals by 2030. IFC’s goal is to increase the reach and breadth of financial services to the unbanked and underserved.  As one of the leading global investors in microfinance, IFC has committed over US$6 billion to approximately 300 institutions.  IFC’s partners have also moved into the digital finance space to reduce costs and diversify product offerings since 2007.  As of June 2017, IFC had invested nearly $500 million into 40 companies and has 50 active projects offering advisory services in companies adapting to, or expanding digital financial services.