Case Study

Market Facilitation to Advance Financial Inclusion

New approaches to influence market dynamics and facilitate systemic change

CGAP’s guidelines for funders encourage funders to adopt a systemic approach in their financial inclusion programs. Systemic approaches have been applied in various sectors, notably agriculture and enterprise development, for many years. In financial inclusion, systemic approaches are still rare, and there is a limited body of knowledge on how to operationalize a systemic approach in this sector.

This case study aims to contribute toward closing this knowledge gap, and shares an example of a funder-stimulated systemic change. It reviews how USAID, through two programs and in partnership with a series of market actors, helped change the microfinance market dynamics in the Philippines—from a specialized activity with limited outreach and highly dependent on subsidized credit, to a more inclusive and robust market-driven segment of the financial sector. The case study is based on information gathered through publications and interviews with key stakeholders in Manila in May 2016.

The study focuses on three key components of Credit Policy Improvement Program (CPIP) and Microenterprise Access to Banking Services program (MABS) and highlights how USAID’s interventions generated systemic change by doing the following:

  1. Encouraging evidence-based, collaborative reform processes to remove regulatory constraints;
  2. Aligning incentives and capacities to attract new players into the market;
  3. Promoting market coordination to enable product innovation.

About this Publication

By Negre, A.