There is a strong consensus that increased levels of financial inclusion – through the extension of savings schemes, credit, insurance, and payments services – contributes significantly to sustainable economic growth.  Positive correlation has also been found between increased financial inclusion and lower inequalities, showing the financial inclusion promotes “pro-poor” growth.

At the household level, financial services allow poor families and small businesses to manage irregular income streams, absorb economic shocks and avoid costly informal services.  Microfinance has a well-known role in supporting entrepreneurship and empowering women.  Savings and credit can play equally powerful roles in helping poor people pay school costs, respond to health concerns and afford clean water and clean energy technology.

UNCDF’s work to extend financial services to the poor follows an “inclusive finance” approach. This approach seeks to ensure that a range of financial products is available to all segments of society, at a reasonable cost, and on a sustainable basis. UNCDF supports a wide range of providers (e.g. microfinance institutions, banks, cooperatives, money transfer companies) and financial products and services (e.g. savings, credit, insurance, payments, remittances). UNCDF also supports newer delivery channels (e.g. mobile phone networks) that offer tremendous potential for scale.

UNCDF delivers its support via:

1. Country programmes: tailored to the needs of individual countries, with dedicated support at the macro level (policy, legal and regulatory framework), the meso-level (financial infrastructure) and the retail level (financial service providers). 
2. Global programmes: designed to complement UNCDF country programmes by promoting product and institutional innovations that expand the frontiers of financial inclusion (e.g. financial inclusion of the youth or microfinance for renewable energy).
3. Advocacy: for policies and regulations that will further financial inclusion, both globally and at country level. This includes support to HRH Princess Máxima of the Netherlands in her role as the UN Secretary-General’s Special Advocate for Inclusive Finance for Development.