Digital Financial Inclusion: A Recap of USAID's Multi-faceted Approach

Access to and use of a range of affordable and safe financial services is critical to the economic growth and resilience of underserved households and communities in the developing world. There are many benefits to expanded financial services: households can smooth income, consumption loss can be mitigated during shocks, and emerging economies can become more stable.

At the same time, financial exclusion can undermine basic efforts to improve communities around the world. This is where development agencies can have a role – in helping to drive the penetration of these basic services into the “real economy” and into the hands of the excluded and underserved.

World-wide, digital technologies are a comparatively cheap, fast, safe, auditable, and increasingly ubiquitous vehicle for achieving universal financial inclusion. While development agencies won’t be involved in delivering these services directly, we play a critical role in addressing needs where markets are unable to respond.  

Our Digital Finance blog series has examined this movement by highlighting a number of USAID’s programs, strategies, and efforts to help bring more people into financial systems that respond to the needs of the poor and underserved. To recap:

• In her introductory post, Kay McGowan explores the role that USAID can play in moving towards universal financial access, specifically in supporting the creation of enduring, inclusive market infrastructure.
• Fernando Maldonado followed up with a piece on USAID’s critical role in supporting the broad goals of financial inclusion. He argues that donors can help to foster the political and regulatory environments necessary for financial services to thrive as well as foster institutional demand across sectors for scalable and sustainable financial services.

The next three posts explore how digital finance can help USAID reach goals around agriculture and humanitarian response/social protection as well as support wider development initiatives around gender.

• Casey Dlott, from the Digital Inclusion team, addresses the particular challenges involved in bridging the gender gap for mobile access and usage. She also shows how our team at USAID is addressing these challenges through partnerships with the Women and the Web Alliance and GSMA.
• Nandini Harihareswara from USAID’s Digital Finance team, along with Elizabeth Diebold and Harsha Kodali from USAID’s Bureau for Food Security, jointly discuss the huge potential of digital financial services to support the financial needs of smallholder farmers. Digital financial services make it easier for farmers to save, increase their access to credit products, improve their household resilience, purchase the inputs they need when they need them, and address the particular needs of women. 
• Finally, Nandini Harihareswara, along with John Lamm (USAID/Food for Peace) and Laura Meissner (USAID/U.S. Office of Foreign Disaster Assistance), show how digital financial services can improve the delivery and impact of humanitarian cash transfer programs. 

There are two overarching themes of these posts:

1. universal financial inclusion is now more achievable than before, and
2. development agencies have much to do, both where services are not meeting people’s needs and where policies or other constraints may be keeping services from expanding effectively.

Thank you to those who have already responded to these posts with your thoughts, ideas, and questions. For those who haven’t yet, we invite you to join the conversation in the comments section below or on Twitter: @USAID_Digital. Together we can identify collaborative ways to achieve universal financial inclusion.