Digitization of Banking Sector - en route to a cashless Africa.

2017 Trends in International Funding for Financial Inclusion

15-Feb-2019 | Independent Research

One of the key takeaways from the latest CGAP Funder Survey is that international funders committed US$42 billion to financial inclusion in 2017—a double-digit percentage increase from the prior year. For the first time in five years, public funding has grown faster than private funding.

At the same time, the nature of funders’ engagement is shifting to reflect their broader development priorities. Funders are increasingly expected to position financial inclusion as a cross-cutting priority and seek synergies in their programming to achieve the Sustainable Development Goals as well as financial inclusion outcomes.

As funders venture into digital financial services (DFS), their interventions focus on building the necessary ecosystem for DFS to thrive as opposed to mostly funding the loan portfolios of financial services providers (FSPs). Because DFS ecosystems are not yet fully developed, funders are focusing on infrastructure, policy, and capacity building, evidenced by a quadrupling of funding for these components in 2017.

And while debt funding continues to be the main funding instrument, equity funding has been on the rise, and grants have declined for the first time in a decade. While this decline in grants is observed across all regions, it is most pronounced in Europe and Central Asia and Latin America and the Caribbean.

This brief article covers the highlights from the 2017 CGAP Funder Survey, which reports funding commitments from 54 international funders, both public and private, as of the end of 2017.

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