The Role of Funders in Digital Finance:

What Can/Should Funders Do?

10 March 2016

What we will cover

• Funders’ involvement in DFS

• What barriers limit the development of digital financial services?

• How can funders address these barriers? • How can funders cooperate and learn from each

other?

2

My organization’s involvement in digital financial services can be best described as…

A. We are not involved in digital financial services

B. DFS is a new area we are exploring

C. We are involved in DFS, but it represents a small part of our financial inclusion portfolio

D. DFS represents a large part of our financial inclusion portfolio

E. DFS is our main focus in financial inclusion

3 A. B. C. D. E.

0%

41%

12%

24%24%

Do you think your organization will increase its focus on digital financial services?

4

A. Yes B. No C. Maybe

A. B. C.

75%

25%

0%

In which regions do you expect to increase your focus?

A. Eastern Europe and Central Asia

B. Sub-Saharan Africa C. Middle East and North

Africa D. South Asia E. East Asia and Pacific F. Latin America and

Caribbean G. Global programs H. We are not increasing or

changing our focus

5

A. B. C. D. E. F. G. H.

0%

76%

6%

12%

0%0%0%

6%

A market systems lens on digital financial services

6 Source: Adapted from CGAP Funder Guidelines

SUPPLY

RULES AND NORMS

Competition rules

Informal norms

Supervision

Regulations (KYC, consumer protection, agent regulation, e-money

regulation)

Interoperability Standards

DEMAND CORE

SUPPORTING

FUNCTIONS Payment platforms

Credit information

systems

Skills & capacity

National ID

Data sharing platforms

Where do you see the main barriers in the development of digital financial services? (select up to three of the following options)

7

A. Limited client uptake B. Reluctance from

financial service providers to innovate

C. Supporting functions are not in place (e.g. weak telecom connectivity, absence of ID systems, …)

D. Restrictive regulatory environments

E. Lack of funding F. Other

A. B. C. D. E. F.

20%

9%

3%3%

26%

40%

Which barriers should funders focus on? (select one of the following options)

A. Limited client uptake B. Reluctance from

financial service providers to innovate

C. Supporting functions are not in place (e.g. weak telecom connectivity, absence of ID systems, …)

D. Restrictive regulatory environments

E. Lack of funding F. Other

8

A. B. C. D. E. F.

25%

6%

13%

0%

6%

50%

What does it take to support digital financial services?

Deep market knowledge

Strong technical capacity

Trusted relationships with market actors

Deep engagement with partners

Flexibility

Long time horizon

9

Is your organization well equipped to support digital financial services?

A. No B. No, but we are

working on it C. Somewhat D. Yes, but we still face

some challenges E. Yes, we are very well

equipped

10 A. B. C. D. E.

10%

20% 20%

30%

20%

Where do you see opportunities for collaboration with other funders? (select your priority)

A. Market information / market studies

B. Research C. Coordination and

market facilitation at the country level

D. Capacity building / training

E. Innovative funding mechanisms

F. Other

11

A. B. C. D. E. F.

23%

8% 8%8%

15%

38%

12

What are your key take aways from this event?

Advancing financial inclusion to improve the lives of the poor

www.cgap.org