Towards a framework for affordability

With development in need of broader thinking around the social complexities of formal economic growth, somehow or other lower-cost business models that enable uptake and usage of financial services at scale will need to be developed for reaching the ‘unbanked’. At the same time, disrupting entrenched market obstacles that impede inclusion will need to be made a key policy focus. While the mobility of capital is largely driven by shareholder interest, the allocation of that capital as a public good must remain an issue for the public sector, assuming it is motivated by the need to overcome social and gender exclusion.

UNCDF’s affordability and bank pricing framework provides a tool for investigating and understanding the extent to which bank pricing is acting as a barrier to or enabler for increasing access to financial services – in particular bank services. From the data, particular insights on affordability emerge, alongside other insights useful for understanding how market dynamics might be improved so as to extend financial inclusion.

Methodology Report

The Methodology Report outlines the:

• Approach to the research study and the data gathering methodology;
• The methodology followed in selecting banks in the individual countries included in this research study, defining the customer target segments, and selecting the bank products and services to be included in the database;
• The methodology followed in undertaking analyses on the bank product and service fees data; and
• The structure of the bank fees database, used to capture and analyse the bank product and service fees data for banks in the respective countries included in this research study.

The research study focused on collecting prices for a range of bank products and services was undertaken as part of the Making Access Possible (MAP) programme. MAP is a multi-country diagnostic and programmatic framework to support expanding access to financial services for individuals and micro and small businesses. Inter alia, it aims to help foster policy environments that enable sustainable financing for development and complement key public policy initiatives through long-term data and measurement.

The MAP programme was initiated by the United Nations Capital Development Fund (UNCDF) to enhance financial inclusion in Least Developed Countries (LDCs). The UNCDF is the UN’s capital investment agency for the world’s least developed countries. It creates new opportunities for poor people and their small businesses by increasing access to microfinance and investment capital.