United Nations Capital Development Fund
UNCDF is the UN’s capital investment agency for the world’s 46 least developed countries. With its capital mandate and instruments, UNCDF offers “last mile” finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development.
UNCDF’s financing models work through two channels: financial inclusion that expands the opportunities for individuals, households, and small businesses to participate in the local economy, providing them with the tools they need to climb out of poverty and manage their financial lives; and by showing how localized investments — through fiscal decentralization, innovative municipal finance, and structured project finance — can drive public and private funding that underpins local economic expansion and sustainable development.
By strengthening how finance works for poor people at the household, small enterprise, and local infrastructure levels, UNCDF contributes to SDG 1 on eradicating poverty and SDG 17 on the means of implementation. By identifying those market segments where innovative financing models can have transformational impact in helping to reach the last mile and address exclusion and inequalities of access, UNCDF contributes to a number of different SDGs.
UNCDF’s Inclusive Digital Economies:
Since 2008, UNCDF has been supporting digital finance with significant success, with digital finance currently the largest part of its inclusive finance portfolio. This includes digital innovations linked to on an off-grid energy, agriculture, employment, health, and transport. With 60 professionals with strong digital finance experience across the globe and with several hundred projects in digital on-going, UNCDF is one of the leading development agencies in digital finance with a mission and expertise to reach very low-income customers in some of the world’s most difficult markets. UNCDF’s digital team and resources are currently spread across several programmes and UNCDF is in the process of consolidating its financial and technical resources to create a comprehensive team of experts in various domains to drive the new strategy “Leaving no one behind in the digital era”.
Based on this experience UNCDF started in 2017 to expand the scope of its programmatic agenda to go beyond digital finance. Through the “Leaving no one behind in the digital era” strategy, UNCDF is supporting, the emergence of inclusive digital economies. The strategy recognizes that reaching the full potential of digital financial inclusion in support of the SDGs aligns with the vision of promoting digital economies for the following reasons:
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The value of DFS is not obvious, especially to poor and vulnerable populations, as it is not closely linked to their ability to respond to their specific constraints and needs around agriculture, education, health, energy, and other key aspects of their daily lives.
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New innovative services should be developed to address these unmet needs. Innovation will not come from traditional providers but mainly from a range of new players (entrepreneurs, start-ups in various sectors, and digital platforms).
The ‘Leaving no one behind in the digital era’ strategy, to move from digital finance to digital economies builds upon and constitutes a logical integration of UNCDF interventions in financial inclusion and digital, developed over many years. The legacy of UNCDF intervention programmes was built through a range of country/regional programmes and global thematic initiatives, which has established a very strong reputation for UNCDF vis-à-vis donors and peers.
Please refer to www.uncdf.org
UNCDF LDC Investment Platform (LDCIP):
The LDC Investment Platform– through grants, reimbursable grants, loans, and guarantees – provides seed funding to investments in LDCS that are deemed too small or too risky by traditional investors. This works to de-risk and “prime the pump” for domestic and foreign investors to participate in local initiatives.
This platform allows the greatest flexibility for UNCDF to apply the optimal funding instrument for each business need, and to crowd in domestic and international investment.
The primary development objective is to increase the number and sustainability of new and existing financially viable, innovative development initiatives, through UNCDF programmes and projects.
It encourages public and private investors to supply investment financing for the consolidation and scale-up of economic initiatives with a proven development impact.
UNCDF in Afghanistan
UNCDF is currently in discussions with UNDP Afghanistan to support the deployment of financial instruments and approaches in the Afghan banking and financial system to avoid its collapse. One of the activities aims to support the digitization of aid disbursements.
The initiative requires preparatory work focused on assessing the readiness of the capabilities of the Mobile Network Operators as well as the readiness of the key players in digitizing payments and the focus of the consultant will be the finalization of relevant technical assessments for this purpose.