Working with Formal Financial Institutions: Expanding Access and Achieving Social Performance
This is an Impact Policy Note. The note brings into focus that:
- Growth of supply is slow in relation to the huge demand for savings as well as for credit, money transfer and insurance services;
- In order to expand and deepen access, it is necessary to work with a range of formal financial institutions.
The document provides justification for governments, donors and social investors in working with the formal financial sector as under:
- The poor people need wide range of services to support and develop their livelihoods;
- Working with formal financial institutions offers new opportunities;
- The priority is to develop other services and scale up provision at a much faster rate.
The article further states that to supply appropriate and affordable financial services to poor, governments, donors and social investors should:
- Adopt clear social goals for their interventions related to access to appropriate and affordable services;
- Clearly identify how interventions support innovations to address the needs of a particular market;
- Undertake sector-wide studies to monitor progress in reducing financial exclusion.