In Malawi UNCDF, together with partners, promote the development of accessible digital economies, focussing on how innovation and technology can increase access and usage of essential services for the underserved and vulnerable groups to ensure sustainable and inclusive local development.
UNCDF’s activities feed into the overall Strategic Framework, supporting mainly Inclusive Digital Economies and Local Transformative Finance practice areas, which includes the Local Climate Adaptive Living Facility (LoCal).
Inclusive Digital Economies
The Leaving No One Behind in the Digital Economy 2019 – 2024 Strategy aims to build digital economies in Malawi that support women, youth and MSMEs to enhance their participation in the market, and will result in poverty reduction, improved livelihoods and economic growth.
UNCDF’s work in financial and digital inclusion is organized into four workstreams to address all sector needs:
- Enabling Policy: Working with government to develop policies that support and incubate an inclusive digital economy;
- Open Payment Ecosystem: Understanding the importance of digital payments as the basis for economically impactful digital services;
- Inclusive Innovation: Supporting entrepreneurs and MSMEs to build inclusive services for the digital economy that improve livelihoods;
- Empowered Customers: Recognizing the need for users to acquire the necessary skills (digital and financial) to adopt new digital services.
While addressing all four workstreams to achieve these results, UNCDF aims to enhance growth of the digital finance sector by applying a market development approach. As a neutral broker UNCDF collaborates with public sector players to equip regulators and policymakers with resources and skills to address the policies and regulations around digital transformation and support innovation and growth of digital finance in the Malawian market, while ensuring customers have the skills to access and use products and services.
In addition, UNCDF provides grants and technical assistance to digital finance providers as they roll out or scale new and relevant products and services in sectors such as agriculture and energy to reach underserved populations and deepen digital inclusion.
UNCDF’s work in the IDE Strategy is supported by the partnership between the European Commission and the Organisation of African, Caribbean and Pacific States (OACPS) and the UN Office of South-South Cooperation (UNOSSC) and the UN India Fund.
Local Transformative Finance (LTF)
UNCDF’s current programmatic footprint in Malawi relates to bringing simple but robust local economic development scalable solutions, inclusive digital economies, investment, and climate resilience.
Our aim is to work with the government of Malawi through the Ministry of Finance and Economic Affairs and the Reserve Bank of Malawi to support local authorities and state-owned enterprises to find alternative financial sources for development including issuance of municipal and sub-national bonds and raising equity through Malawi Stock Exchange.
Also working with the Ministry of Local Government to strengthen the capacity of local government authorities as part of decentralization process and transferring financial autonomy reduce overdependence to the central government. This initiative is supported by UNCDF work on innovative mechanisms to design, finance and implement revenue generating projects at local level by involving communities and the private sector.
UNCDF further brings innovative solutions such as energy efficient, clean cooking, off-grid rural electrification and water purification technologies to increase the share of the population with access to renewable and sustainable energy solutions to mitigate climate change impact and improve the livelihood of communities.
Local Climate Adaptive Living Facility (LoCal)
UNCDF is working in partnership with the Government of Malawi to establish the LoCAL mechanism to provide supplementary capital to finance local public climate change resilient investments in target districts, with focus on nature-based solutions and with strong synergies with environmental conservation and sustainability. LoCAL’s Performance-Based Climate Resilience Grants (“PBCRGs”) will function as a top up to existing general performance-based grant systems (GESD).
LoCAL-Malawi also aims to increase awareness and capacities to respond to climate change at the local level, integrate climate change adaptation into local governments' planning and budgeting systems, in a participatory and gender-responsive manner, and increase level of climate finance available to local government authorities for climate-smart, resilient investments. LoCAL supports the Government of Malawi to respond to the Paris Agreement, advance Malawi’s National Adaptation Plan (NAP) implementation and contribute to achieving climate-related Sustainable Development Goals (SDGs)– with concrete action at the local level, where it is most needed.