London, March 2, 2015 — The United Kingdom’s Department for International Development (DFID) and the World Bank Group today announced the Harnessing Innovation for Financial Inclusion (HiFi) program, a new partnership that will focus on the use of technological innovations to deliver financial services to some of the world’s poorest and most excluded people, particularly women and people living in fragile and conflict-affected areas.
The program, supported by a 42 million sterling ($64 million equivalent) contribution from the U.K. government, will provide technical assistance to financial service providers to help them develop technology-driven business models to deliver financial services to the underserved. The program will also provide expertise to help developing countries implement a strategic framework for integrating the modernization of government, retail, and remittance payment systems.
The seven year program, will allocate funds across the World Bank, IFC and the Consultative Group to Assist the Poor (CGAP) to support advisory services for capacity building for microfinance institutions, banks and other licensed non-bank financial institutions; generate and share solutions to catalyze the development of provider ecosystems; as well as help countries to modernize and develop national payment systems.
“Digital and mobile technology can help deliver essential financial services more cheaply—helping improve the lives of individuals and support the growth of small businesses,” said IFC Executive Vice President and CEO Jin-Yong Cai. “With the support of the U.K. government, this partnership can play a catalytic role in boosting economic growth and inclusion in the world’s poorest countries.”
“Hardworking people in developing countries often lack the financial tools we take for granted.” said U.K. Secretary of State for International Development Justine Greening.
“The U.K. is already a leader in using mobile technology to deliver money services. This program will give millions more the ability to plan for their family’s future, whether it’s saving the rewards from a bumper crop or insuring against a bad harvest.”
Technology has the power to help bridge the financial inclusion gap as it reduces the costs associated with small value transactions, helps reach out to larger numbers of people with low- cost technology, such as mobile phones and top-up payments, and allows for delivery channels that overcome the challenges associated with the lack of physical infrastructure such as point of sales systems in shops.
The World Bank estimates that about 2.5 billion adults don't have a bank account and 200 million businesses lack access to the credit they need to grow, and has committed to achieving universal access to finance by 2020.
The program is expected to provide 90 million unbanked and under-banked people with access to financial services, at least a third of whom will be women, and provide 300,000 people with employment opportunities and increased income. The program will initially cover up to 20 targeted countries in Africa, the Middle East and Asia, with a focus on fragile and conflict-affected states.
About the World Bank Group
The World Bank Group plays a key role in the global effort to end extreme poverty and boost shared prosperity. It consists of five institutions: the World Bank, including the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Working together in more than 100 countries, these institutions provide financing, advice, and other solutions that enable countries to address the most urgent challenges of development. For more information, please visit www.worldbank.org, www.miga.org, and ifc.org.
About The Department for International Development (DFID)
We lead the U.K. government’s work to end extreme poverty. Find out more at www.gov.uk/dfid
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CGAP (the Consultative Group to Assist the Poor) is a global partnership of 34 leading organizations that seek to advance financial inclusion. CGAP develops innovative solutions through practical research and active engagement with financial service providers, policy makers, and funders to enable approaches at scale. Housed at the World Bank, CGAP combines a pragmatic approach to responsible market development with an evidence-based advocacy platform to increase access to the financial services the poor need to improve their lives. More at www.cgap.org.