Enhancing Financial Inclusion Through Digital Innovation

1. ITU Workshop on “Digital Financial Services and Financial Inclusion” (Geneva, Switzerland, 4 December 2014) Going cash lite… building supply and demand Till Bruett, Programme Manager, UN Capital Development Fund, mm4p@uncdf.org

2. UNCDF’s focus: financing for development 2 KEY AREAS OF WORK • Local Development Finance • Focus on public finance and decentralization • Inclusive Finance • Focus on access to financial services for individuals and small enterprises COMMON THREADS • Goal: inclusive and sustainable growth • Approach: piloting leading to national reforms/scalability • Tools: capital investment + technical assistance

3. Local Development Finance: where we work We help governments by: 1. Fostering decentralization and local governments capacity to provide services We pilot and scale up sub-national planning systems We pilot and scale up Public Finance Management systems 2. Leveraging local governments capacity to meet specific development challenges climate change resilience; food security; social protection; gender equality; local economic development;

4. Local Development Finance: where we work

5. Inclusive Finance: where we work We bring the financial sector to the poor by: • Building inclusive financial sectors We support policy makers and regulators We finance and incentive financial service providers We build support services for microfinance We promote financial literacy and consumer protection (2) Testing innovative approaches globally Bring market leaders to LDCs (MicroLead) Enable youth access to financial services (YouthStart) Lifting the poor out of energy poverty (CleanStart) Spreading technology-based banking in LDCs (Mobile Money for the Poor) Innovations in Remittances and Micro-insurance Empowering people through electronic payments (Better than Cash)

6. Inclusive Finance: where we work

7. Mobile Money for the Poor Started through a joint UNCDF-UNDP-EU-AusAid Pacific Financial Inclusion Programme Developed to build digital finance ecosystems that can serve all citizens, including rural and women in LDCs Started March, 2012, Based in Brussels, Belgium Programs in Uganda, Malawi, Liberia, Lao and Nepal – entering Benin, Senegal, Zambia Coordinating with other global funders (IFC, World Bank, DFID, GSMA, etc.)

8. DF Stages of Development

9. Theory of Change Expansion to Consolidation Start-up to Expansion Inception to Start-up

10. Translating Analysis into Work Analysis Framework Work Stream

11. Customer at the Center Where does policy and regulation most?

12. Making the Shift to Electronic Payments December 2014

13. The Better Than Cash Alliance is a global alliance of governments, the private sector, and the development community committed to shifting payments from cash to electronic. www.BetterThanCash.org

14. What Is the Problem? Cash Is Expensive Inefficient Unsecure Untraceable

15. We believe that electronic payments are a part of the solution

16. Why Shift to Electronic Payments? Financial Inclusion New Market Access Cost Savings Transparency Security • Decrease costs of in-kind payments. • Increase accountability and tracking, reducing corruption and theft. Typically safer and have faster delivery. Can accelerate access to and use of financial services. Open doors for new business models for previously excluded people and create additional benefits.

17. The Payments Shift Grid

18. Challenges to Making the Shift • Lack of political will due to resistance from vested interests and inadequate coordination • Absence of a robust, reliable, and interoperable infrastructure due to perceived zero-sum game • Regulatory barriers to innovation and e-payments due to cross-sector areas affected

19. What the Better Than Cash Alliance Does • Advocates for payers to commit to transition the distribution of government benefits, humanitarian aid, and payroll and supplier payments from cash to electronic • Provides the policy, technical, and financial assistance needed to identify and implement the most effective approach for local market conditions • Develops cutting-edge research products, good practices, and case studies in order to make the shift in country markets and achieve scale globally

20. Committing Members • Governments: 9 committed, 12 in pipeline. • Private sector: One committed, many others in pipeline. • Multi- and bi-lateral organizations: 3 committed, 4 in pipeline. • Nongovernmental organizations: 10 committed, plus others in the pipeline. Afghanistan Kenya Malawi Colombia Peru Philippines Rwanda AND MANY OTHERS!

21. Technical Assistance Facility Delegates from the Philippines with hosts from Kenya during a Peer Learning Exchange in August 2013 • TAF projects: Peer learning between governments (audit, tax, budget, etc.); regional African Finance Ministries meeting; diagnostic and implementation grants. • Ecosystem partnership development: Drawing on neutrality of being based at UN and UNCDF remit to also work with private sector, focus on convening and connecting at the country level.

22. Knowledge Generation White Paper, Diagnostics and Case Studies • The Journey Toward ‘Cash Lite’ • Country Diagnostics (Philippines, Colombia, Nigeria, Malawi) • G2P Digital Payment Case Studies (Kenya, Haiti, Uganda, Philippines) • Government Shift Case Study (Mexico) • Stakeholder Case Series (Colombia, Nigeria, Philippines) Technical Toolkits • Ecosystem measurement • Ecosystem diagnostics Stakeholder Toolkits • Government • Business • Development Organizations

23. Joining the Better Than Cash Alliance What do you get? • Recognized for leadership. • Invited to participate in events and learning opportunities. • Given access to the latest evidence and case studies. • Eligible for technical assistance and/or funding. How can you join? • Learn more from BTCA team • Identify opportunities (cash payments) to shift • Make a commitment to shift cash payments to electronic • Start or advance the shift info@betterthancash.org www.BetterThanCash.org