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  3. Economic
  4. Financial Inclusion

Economic

  • Financial Inclusion
  • Access to Markets
  • Livelihood Diversification

Financial Inclusion

Interventions that increase access to financial tools like insurance, credit, and digital payment systems help strengthen resilience for poor individuals.

Financial services include credit, savings, insurance, payment mechanisms, and transaction accounts. Services such as these make it possible to move resources across time and space — from good years to bad, from locations with normal conditions to others suffering from natural disasters. Financial inclusion allows for broad-based participation of poor and marginalized groups in processes that facilitate transfers of funds between individuals, groups, and financial institutions. Removing barriers to accessing financial tools helps smooth consumption in the face of unexpected setbacks. Informal financial systems also play an important role, especially in the immediate aftermath of a crisis.

Approach

Digital payments expand the social network able to send money in times of crisis. They also increase the efficiency and targeting of cash transfer programs. Removing cost and behavioral barriers to savings accounts enables households to limit reductions in consumption during crises. Insurance is often in low demand among poor households. However, it can potentially help households better manage food security and income shocks.

Evidence

Interventions addressing financial market failures — e.g., through insurance or credit/grants — increase resilience for poor individuals. Studies suggest index-based livestock insurance can build household resilience among herders. Combining technical training with asset transfers may also build household resilience. Research suggests informal financial systems are more important than formal finance in immediate aftermath of disaster.

More About Financial Inclusion

Project Overview

USAID Kuza and Impact for Northern Kenya Fund

28 Jul 2021 - USAID Kuza Activity, USAID Resilience Challenge Fund and ACDI/VOCA

In October 2020, the Impact for Northern Kenya Fund (“the Fund”) was launched to finance clients that are drivers of economic and social growth.

View Resource
Project Overview

The USAID Kuza Activity

12 Jul 2021 - The USAID Kuza Activity, ACDI/VOCA

Get the basics on USAID Kuza, which works to increase the capacity of specific counties in Kenya to utilize public resources and attract private capital.

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Technical Guidance

What Are Future Financing Options for Shock Responsive Social Protection?

31 May 2021 - Social Protection Approaches to COVID-19 Expert Advice Service, DAI Global

How can development partners finance shock-responsive social protection? This resource provides approaches to financing, financing instruments and more.

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Discussion Paper

Gender and Social Protection in the COVID-19 Economic Recovery: Opportunities and Challenges

01 May 2021 - Social Protection Approaches to COVID-19: Expert Advice Service, DAI Global and High-Quality Technical Assistance for Results (HEART)

Focusing on a gender-transformative economic recovery in the wake of COVID-19 that supports gender equality and social protection.

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