Responsible Finance Forum

Advancing Responsible Finance for Greater Development Impact

Susan Dorasil, Kim Nguyen Van, Motoko Aizawa, Ekaterina Grigoryeva and Margaret J. Miller
27 January 2011
Source:  IFC
 
 BMZ
 
 CGAP

A Stock-Taking of Strategies and Approaches among Development Agencies and Development Finance Institutions

This report has been prepared as an on-going contribution to the Responsible Finance Forum. The purpose of the report is to contribute to the exchange of knowledge and best practice among institutions working towards the goals of balanced financial sector development and sustainable economic growth.

The report aims to facilitate discussions of new challenges in promoting responsible finance and highlight the benefits of coordinating activities around this topic in the international development context. It is expected to contribute to a collaborative data-sharing effort among a growing group of institutions and foster interest in designing a more systematic process of accumulating and exchanging information on responsible finance. Such a process can help identify potential synergies and opportunities for cooperation as well as gaps in serving our clients better.
The report features an overview of the conceptual framework and current trends in the three pillars of responsible finance: (I) regulation for consumer protection, (II) responsible practices by financial providers, and (III) financial capability. It provides a background and rationale behind the concept of responsible finance and its role in the development institutions’ strategies and programs such as those related to financial markets development, access to finance, SME development, financial inclusion, and poverty reduction.

The report intends to build on the data provided by participating institutions to highlight current trends and models that can help advance the inter-institutional discussion on why and how the international development community can promote responsible finance through working with both public and private sector.

Drawing on current best practices among participating institutions, the report also suggests that working together on responsible finance issues can help move this agenda forward. Together, international donor and investor agencies have many opportunities to create more responsible financial markets worldwide, leveraging our roles as partners and advisors to governments and firms, agents of change in public sector transformation, investors in private-sector financial institutions, and knowledge and thought leaders in the development field.

The report also highlights diverse perspectives on the roles of governments, commercial investors and philanthropic agencies, various types of financial providers, consumers, non-governmental organizations, academia, and advocacy groups in advancing the work on responsible finance.