Underserved populations, especially women, youth, and micro, small, and medium-sized enterprises (MSMEs), face multiple barriers to accessing digital financial services (DFS). These include a lack of digital and financial literacy skills, limited access to technology, high costs of devices, data, etc., and cultural and gender norms that hinder participation. For many, DFS could be a lifeline, providing better access to financial resources and opportunities. However, overcoming these barriers requires a targeted approach, and this is where UNCDF’s Digital Finance for Resilience (DFS4Res) programme, active since 2020, plays a vital role in building a more inclusive digital financial services ecosystem.

The programme is not just about expanding access to digital banking; it is about unlocking the economic potential of communities by connecting people to financial tools that support entrepreneurship, stimulate local markets, and create pathways to employment. With a goal of reaching at least 600,000 low-income individuals, including women, youth, and MSMEs, the programme is a strategic investment in long-term economic resilience.

With support from the European Union (EU) and the Organization of African, Caribbean and Pacific States (OACPS), UNCDF is working to build inclusive digital financial ecosystems across high-risk markets, including Ethiopia, Gabon, Malawi and Niger, as well as countries in the Pacific and Caribbean regions. By partnering with governments and key stakeholders, UNCDF is helping shape policy environments that enable broader access to digital financial services for groups who have long been undeserved, and often unbanked, by the traditional finance system.

Addressing challenges for underserved groups

Building a truly resilient and inclusive digital finance ecosystem requires more than just expanding access; it demands systemic change. That is why the programme works directly with governments, central banks, and other stakeholders to design and implement policies that reduce costs, eliminate structural barriers, and create space for broader participation.

These reforms go beyond inclusion, enabling people to build livelihoods, grow small enterprises, and participate meaningfully in their local economies. Through policy dialogues and targeted support, the programme is helping shape financial systems that respond to real needs and unlock long-term opportunities for communities that have historically been left out.

Key Innovations in Financial Inclusion

Licensing and payments regulations: UNCDF has provided technical assistance and best practice guidance to the Eastern Caribbean Central Bank as well as the Central Bank of Trinidad and Tobago to support the licensing and supervision of e-money providers in the Eastern Caribbean region, a relatively new development in the Caribbean financial space. This regulatory reform is unlocking new market opportunities by enabling innovative, low-cost financial services tailored to the needs of underserved populations by advancing financial inclusion across the Eastern Caribbean Currency Union (ECCU) and Trinidad and Tobago through the digital economy.

“Digital payments have changed the way I run my farm. I used to spend hours traveling to the market and waiting for customers or cash. Now, buyers can pay online and come directly to the farm for collection. It’s faster, safer, and I don’t lose money to middlemen anymore. I feel more in control of my business.” Laura Persad, female farmer in Trinidad.

This shift expands access, opens new market opportunities, and includes more people in the digital economy.

Regulatory developments: In partnership with the Eastern Caribbean Central Bank (ECCB), the programme is advancing a payments bill and regulatory framework for e-money and virtual assets. These efforts are laying the foundation for a more integrated and inclusive financial ecosystem across eight island nations. One that supports innovation, encourages participation, and strengthens economic resilience.

Automating data for enhanced inclusion

Often, central banks in Least Developed Countries such as Ethiopia, Niger and Malawi, as well as in developing economies like Fiji and Samoa, face persistent challenges in managing financial data, limiting their ability to design responsive, inclusive financial systems and access. The DFS4Res programme addresses this by partnering with these institutions to automate data collection, enabling smarter decisions and resource use. Strengthening these data foundations helps identify underserved segments, unlocking new market opportunities, and expanding participation in the digital economy.

“At the Central Bank of Samoa, we acknowledge the importance of data-driven supervision in the digital finance era. However, our existing data infrastructure limits our ability to fully leverage the power of data. In collaboration with UNCDF, we identified several potential solutions that enable us to embark on a transformative journey toward becoming a data-driven supervisor. We are grateful for the guidance and support provided by UNCDF in conducting the data diagnostic assessments. We eagerly anticipate their continued partnership as we endeavor to enhance our technology stack and human resource capacity to fully harness the potential of data,” states Lanna Lome-Ieremia, Manager of Financial Systems Development, Central Bank of Samoa.

In Ethiopia, UNCDF supported the National Bank in diagnosing its data architecture and developing a prototype to automate data collection and reporting from financial service providers, an approach that enhances consumer protection and regulatory oversight. It also contributes to de-risking underserved segments by improving the visibility and quality of financial data used by lenders to assess and serve these groups.

In Malawi, the programme has focused on digitizing the Reserve Bank’s data systems, including the creation of a centralized portal to map financial access points nationwide. This data-driven approach helps direct financial flows to areas with the greatest potential for inclusive growth and local enterprise development.

In Niger, the programme is working with the Regional Central Bank (BCEAO), to automate the collection of financial inclusion indicators by geolocating service points across the West African Economic and Monetary Union (WAEMU). This geospatial mapping provides a clearer picture of where services are concentrated, and where gaps remain, helping stakeholders better target interventions that expand access and participation.

By automating data collection, these countries are strengthening the financial infrastructure needed to drive inclusive, sustainable growth. This foundational shift enables regulators to better target resources, expand financial inclusion, and unlock opportunities for populations and communities who lack access to mainstream financial services.

Consumer protection enhancements

UNCDF’s DFS4Resilience programme has strengthened Malawi's legal and regulatory frameworks for consumer protection and payments systems. The National Payments System in Malawi is now the primary access point for financial inclusion, with 69% of financially included individuals accessing services through mobile money.

Key efforts include:

• Reviewing the ‘Payments Systems Act’ to enhance interoperability and enable the growth of access points.

• Collaborating with various organizations to build a robust consumer protection culture, ensuring that policies align with market trends and meet the needs of underserved groups.

In Niger, UNCDF partnered with the Executive Secretariat of the National Strategy for Financial Inclusion and the Niger Financial Services Quality Observatory (OQSF-NE) to promote a strong consumer protection culture, an essential pillar for building trust in financial systems. The successful establishment of the OQSF-NE draws on best practices from other countries, providing a structured mechanism to monitor consumer protection and address financial complaints more effectively. This mirrors similar regulatory reforms in Kenya and Nigeria, where strengthened oversight has helped expand access to digital financial services, particularly for women and MSMEs.

Measuring Effectiveness and Impact

Monitoring the effectiveness of policy changes requires consistent, data-driven insights. Tracking indicators like access to formal ID and use of digital financial services helps assess real impact, especially on vulnerable groups. Tools like ‘Digital Financial Inclusion Surveys’ in the Caribbean, along with stakeholder feedback, help refine policies to meet evolving needs. These insights ultimately show whether interventions are creating jobs, expanding markets, and reducing poverty.

UNCDF's Unique Mandate and Future Aspirations

Through the DFS4Resilience programme, UNCDF is committed to advancing inclusive digital economies by offering targeted technical assistance and strengthening institutional and market capabilities. Guided by its capital mandate, UNCDF directs finance where it can unlock systemic change, supporting policy shifts, enabling innovation, unlocking affordable access, and driving scalable impact.