The Consultative Group to Assist the Poor recently issued new guidelines for funders of financial inclusion that encourage funders to take up a more market systems oriented approach. However, there is one question that has always come up, and that question is while it sounds right to take up a more systematic approach when it comes to financial inclusion, what does it mean in practice? In short, it means considering the different aspects of a market system and breaking down the barriers that exclude the poor by pushing market actors to take weak or missing functions in the market.
The interesting thing is that market system approaches have been applied in different sectors, most notably in enterprise development and agriculture, for years now and operation tools and lessons have been developed based on the experiences. When it comes to financial inclusion, market systems approach experiences are still very rare, and the body of accessible knowledge on how one can operationalize financial inclusion market systems approaches is still very limited. To fill the gaps, CGAP is planning to create case studies that demonstrate market systems development practices and to highlight the effects these operations and strategies will have.
When great place to start is getting the Springfield Center’s Operational Guide on How to Make Markets Works for the Poor. The Guide will take you through the most crucial steps of implementing market systems programs and also provides examples extracted from the field. This guide is the ultimate reference for practitioners looking to develop market systems and has considerably influenced Market Systems Approach to Financial Inclusion: CGAP Guidelines for Funders.
Another great resource to refer to when looking to learn more about the development of market systems is BEAM Exchange – an online forum that a provides a platform on which the market systems development community can come together. It is a great point to start from if you want to access guidance, learn more about market systems approaches, or to join informative and educative webinars. If you are in the search for evidence that proves that market system programs are much better than more traditional interventions, then consider looking at the evidence map, which gives you access to evidence by the level of results and sector.
Another great place to engage like-minded market systems development specialists is the SEEP Network’s Market Facilitation Initiative. Here, you will find tools for facilitators and practitioner learning groups.
USAID is amongst the few known funders who take a market systems approach deliberately and who invest in assimilating market systems thinking into operations and policies. The organization’s Leveraging Economic Opportunities Project, also known as LEO, provides advice and practical guidance to USAID programs, and most of the tools it uses are accessible on the organization’s learning platform The Learning Lab or Microlinks. Here, you’ll find a market systems development framework, and you’ll get to learn how it is related to the economic empowerment of women and different value chains. At the same time, you get access to practical guides that you can use to build your very own facilitation skills – look at Being A Market Facilitator.
To learn more on how to diagnose market systems, then consider looking at Making Access Possible or MAP. Making Access Possible is a multi-country initiative that was established to help support financial inclusion through an evidence-based analysis process that incorporates a demand-sided survey with regulatory analysis and comprehensive supply. MAP was initiated by UNCDF (United Nations Capital Development Fund) and is effected in partnership with The Center for Financial Regulation and Inclusion and FinMark Trust. On its website, you will find diagnostic reports from ten countries – from Thailand to Botswana – as well as lessons MAP has learned.