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Blended Finance for Financial Inclusion

Convergence

This Brief analyzes the use of blended finance for financial inclusion, leveraging data from Convergence’s historical deals database. Financial inclusion is a cross-cutting theme, which applies to blended finance deals across multiple sectors. One quarter of blended finance deals have provided financing to domestic banks, microfinance institutions (MFIs), or alternative financial service providers (FSPs) to support greater financial inclusion. While the majority of blended finance deals for financial inclusion have focused on access to microfinance (40%) or access to traditional commercial finance (29%), agriculture finance and pay-as-you-go energy (PAYGO) have also been common.

Blended finance for financial inclusion can serve a ‘demonstration effect’ role for impact themes, given its track record and market development. Blended finance should be used to build financially inclusive markets, and practitioners should strive to reduce the amount of concessional capital required over time as the market ‘graduates’ and can attract traditional sources of finance.

    Date
    22 January, 2019
    Type
    Data Briefs
    Region Focus
    Caribbean, Central Africa, Central America, Central Asia, East Africa, East Asia, Eastern Europe, Global, North Africa, North America, Oceania, South America, South Asia, Southeast Asia, Southern Africa, West Africa, West Asia, Western Europe, Latin America & the Caribbean, Sub-Saharan Africa, Europe and Central Asia, East Asia and Pacific, Middle East and North Africa
    Sector Focus
    Agriculture, Energy, Financial Services
    Sub-Sector Focus
    Agriculture Finance, Business Banking, Capital Markets, Education Finance, Health Services, Housing Finance, Insurance, Microfinance / Retail Banking, Off-Grid Energy