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CGAP Launches New Five-Year Strategy

CGAP envisions responsible and inclusive financial ecosystems that enable a green, resilient, and equitable world

 

São Paulo, Brazil—June 2, 2023: CGAP today announced a new five-year strategy ("CGAP VII") to guide its work in helping build responsible and inclusive financial ecosystems that enable a green, resilient, and equitable world. In light of the challenging global context and the disproportionate impacts of various crises on vulnerable populations, CGAP's new strategy sets forth a comprehensive approach to addressing urgent global issues by reimagining financial inclusion.

While people living in poverty constantly juggle an evolving set of risks and crises, the additional challenges posed in recent years by the COVID-19 pandemic, inflation, climate change, conflicts, and other shocks have globally intensified poverty and inequality. And with the current global context disproportionately impacting the most vulnerable, particularly women and girls, the timeline to close the global gender gap has increased by a full generation (from 99.5 years to 135.6 years).

“The fragility of our world is undeniable, but with determination and action, we can boost resilience and create opportunities for a better future,” said Sophie Sirtaine, CGAP CEO. “Our new strategy is built on a recognition that, in the new global context, there are rising vulnerabilities that need to be addressed, but also emerging opportunities for inclusive finance to contribute to a greener and more resilient and inclusive future.”

To fully leverage financial services as tools that ensure all of society—especially the most vulnerable—can improve livelihoods and withstand shocks, CGAP’s reimagined approach to financial inclusion focuses on how to intentionally and explicitly contribute to broader development outcomes. Evidence shows that financial inclusion enables 13 of the Sustainable Development Goals and could help the world get back on track to achieve the SDGs by 2030.

“The advancement of digital economies and the transformation of financial sectors by technology disruptions and enabling policy reforms, coupled with the increase of socially minded investments, give us hope that building a world where vulnerable people are meaningfully served by responsible inclusive financial ecosystems is more possible than ever,” added Sirtaine.  

These positive trends have the potential to create new opportunities for the 1.4 billion individuals who still don’t have a financial account, let alone access to a broader range of financial services tailored for their needs. Rapid innovation is making digital financial services more affordable, accessible, and relevant and data sharing frameworks are providing opportunities to leverage alternative digital data trails to reach previously financially excluded and underserved populations. In addition, CGAP’s Cross-Border Funder Survey shows that public and private commitments towards financial inclusion more than doubled since 2015, offering hopes for scaling innovative digital solutions.

To maximize the potential of financial inclusion as an enabler for broader development goals, CGAP will work toward the following outcome areas under its new strategy, which shapes its work from July 2023 through June 2028:

  • Foundational outcomes:
    • Generating evidence of what works, where, and for whom
    • Promoting enabling responsible financial ecosystems
    • Enhancing the effectiveness of impact investing in inclusive finance and the inclusiveness of carbon markets
  • Intermediary outcome:
    • Increasing access to financial accounts (“breadth of financial inclusion”), increasing access to a suite of responsible financial products and services (“depth of financial inclusion”), and increasing the practical benefits and positive outcomes that financial services contribute to (“utility of financial inclusion”)
  • High-level outcomes:
    • Mobilizing financial services to enable
      • climate adaptation, mitigation and a just transition;
      • resilience to shocks and risk management;
      • And empowerment of women and growth of micro and small enterprises.

CGAP VII evolves from the CGAP VI strategy, which focused on asking “financial inclusion for what?”. In other words, positioning financial inclusion not as an end in itself, but as an enabler for helping people living in poverty to generate income, access essential services, and protect basic standards of living. While CGAP VII maintains this focus on impact, it elevates its sights even further to contribute to green, resilient, and inclusive development through inclusive finance.

CGAP VII was endorsed by its Council of Governors on June 2, 2023, during CGAP’s annual meeting in São Paulo, Brazil. Juliet Anammah, CGAP’s Executive Committee Chair, welcomed CGAP's new strategy at the meeting, saying it created an important framework not just for CGAP, but for the future direction of the financial inclusion agenda.

“CGAP is a collective of global development partners and remains committed to learning and growing together with its partners,” said Anammah. “This new strategy will guide it to generate the required evidence and knowledge to implement inclusive finance solutions at scale.”