Responsible Finance Forum

HOW THE DEVELOPMENT SECTOR IS CHANNELING MONEY TO DIGITAL FINANCIAL SERVICES

Howard Miller
29 July 2020

Development funders are increasingly embracing the potential of digital financial services (DFS) to promote financial inclusion. As these funders – bilaterals, multilaterals, development finance institutions and private foundations – continue to look for ways to respond to emerging crises and opportunities, the support for digital finance and the ecosystem around it is increasing in prominence. However, until now, we have not had a systematic way of understanding how much funding was committed to DFS and where it was going.

In order to create an evidence base and understanding of where and how funds flow to DFS, we developed a unique and innovative methodology to identify, classify and measure the funding flows going to DFS. This project aims to help the inclusive finance sector better coordinate, fill gaps, and identify new pathways for funding the sustainable development of digital financial services for financial inclusion. This report highlights four key findings gleaned from an early analysis to test and refine this methodology. The findings can provide funders with information to guide their approaches to supporting the development of reliable and effective DFS systems for the benefit of low-income populations around the world.

Originally published on the Center for Financial Inclusion’s website.