External Portfolio Review finds UNCDF Interventions Effective in Increasing Access to Financial Services in the Least Developed Countries
  • September 05, 2013

Periodic independent evaluations of UNCDF’s operational activities are one of the cornerstones of UNCDF’s learning strategy. They allow UNCDF to gain an objective assessment of what it does well and what it can improve.

In respect of its evaluation policy, UNCDF recently commissioned an external review of its performance in supporting Least Developed Countries (LDCs) develop their inclusive financial sectors. The review looked at the performance of 93 Financial Service Providers (FSPs) in 19 countries (88% of the total portfolio supported by UNCDF), as well as contributions by UNCDF to changes in national policy and institutional environments via 14 UNCDF country sector programmes and 2 global thematic initiatives, MicroLead and YouthStart.

The external review provided solid evidence that UNCDF is succeeding in achieving the targets set in UNCDF’s corporate management plan 2010-2013. UNCDF set a target to “strengthen the capacities of financial service providers (FSPs) in 25 LDCs to provide pro-poor products and services that will leverage at least 10 times UNCDF’s original core investments by 2015.” The portfolio review found that UNCDF has significantly exceeded this target: “overall, the outreach leverage at June 2011 was 17.2 to 1 for the loan portfolio for UNCDF core funds. The outreach leverage of deposits mobilized was 19 to 1, for UNCDF core funds.

The portfolio review also concluded that in expanding its support to rural areas UNCDF had met its objectives of leveraging funding and mobilizing domestic savings: “More funded FSPs had increased their ability to more sustainably finance operations by accessing domestic savings. The number of funded FSPs that were mobilizing savings had increased from 74 at baseline to 82 (88% of portfolio) by June 2011. These portfolio FSPs had also grown their deposits dramatically over time.

The portfolio review found UNCDF’s interventions to be ‘good’ in four of the six assessment criteria (relevance, efficiency, effectiveness, portfolio management) and ‘(highly) acceptable’ in the remaining two (likely impact and sustainability), and noted that “UNCDF programmes help microfinance institutions achieve sustainable growth in under-served markets/market segments.

While highlighting the strengths of the portfolio, the review also pointed to some areas for improvement. These included proposals to:

  • Better distinguish UNCDF programming depending on the characteristics of the markets which are being targeted. 
  • Redesign the financing model for its country sector programmes to improve funding leverage and to facilitate better participation in the setting-up and governance of more viable investment fund structures. 
  • Develop clear knowledge management mechanisms to better document and disseminate UNCDF’s results and experiences in inclusive finance.

As part of its culture of results-based management, UNCDF is committed to addressing the challenges that were highlighted by the evaluation report.

“UNCDF is encouraged by these positive assessments of our work in Inclusive Finance,” said Henri Dommel, Director of the UNCDF Inclusive Finance Practice Area. “At the same time we are mindful of where we need to do better, and committed to doing so. Through our Management Response to the portfolio review’s recommendations, we are setting out a series of concrete and time bound key actions to address the main findings pointed out by the evaluators. We are refining our monitoring indicators, staying responsive to evolving demands from our least developed county partners by developing new Inclusive Finance products, as well as taking measures to ensure that our operational capacity and internal structures keep pace with the growth in demand for our services.”

UNCDF continues to be committed to making the results of all its external reviews and evaluations available to its stakeholders by publishing the completed reports and their accompanying management responses on the UNCDF Website ( and on UNDP’s Evaluation Resource Centre (


About UNCDF Inclusive Finance

UNCDF provides seed capital – grants and loans – and technical support through inclusive finance programmes to ensure that more households and small business gain access to credit, savings, insurance and other financial services that expand opportunities and reduce vulnerabilities. UNCDF’s ability to provide risk capital directly to the private sector is helping bring new financial products to underserved and hard to reach markets and spurring innovations. Through its flexible grant and loan instruments, 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, payment services, remittances). UNCDF is also paying particular attention to the new drivers of financial inclusion, especially innovative distribution channels and technology such as mobile money.


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