Supporting increased access to financial services is a key part of the Australian Government’s aid program.
Financial inclusion helps poor men and women to save, to insure against risks and to obtain loans to build their businesses. It is also critical for economic growth and stability. However, around two billion people do not have access to formal financial services.
Not only does financial inclusion bring disadvantaged businesses into the formal sector, but the financial service providers are increasingly private sector companies. These range from the smallest microfinance institutions (MFIs) to the largest multinational finance companies.
Some of the Australian aid initiatives with private sector partners include:
- (CGAP) Consultative Group to Assist the Poor with members including Citi Foundation, Ford Foundation, the Bill and Melinda Gates Foundation and MasterCard Foundation. CGAP works to better understand the financial needs of the poor, explore viable business models, promote digital innovation; and, improve understanding of the policy and regulatory environment needed to achieve financial inclusion.
- Women’s World Banking’s global network of 38 microfinance institutions and business partners, including Equity Bank in Kenya and Card Bank in the Philippines, provides credit, insurance and savings products.
- The Pacific Financial Inclusion Program aims to add a million Pacific Islanders to the formal financial sector by 2019. Because traditional branch models of banking do not reach people in remote and rural areas, Australia has MOUs with Westpac and Australia New Zealand Banking Group and is collaborating with Vodafone and Digicel on mobile banking in the Pacific.
- The Better than Cash Alliance (housed in UNCDF) is working with private sector partners including Visa, MasterCard, Citi and The Coca-Cola Company, to transition to digital payments. Governments, businesses and individuals in developing countries make billions of dollars of payments in cash. Personal remittance flows from developed countries exceed three times the value of global official aid. Converting these funds to electronic payments reduces costs, leads to safer and speedier delivery and facilitates increased access to financial services.
- Shaping Inclusive Finance Transformations in the Mekong countries; the Lao PDR Rural Livelihoods Program; the PNG Microfinance Expansion Program; and the Australia-Indonesia Partnership for Rural Development.
Read more about DFAT’s investment priorities: