Value Chain Glossary: Financial Services
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Financial Services
Services provided by banks, credit card companies, insurance companies and other non-bank financial institutions. Includes savings, credit, insurance, investment and lending. Donor agencies help facilitate access to financial services for under served MSEs and for the rural poor through a series of priorities including improving the enabling the environment for the provision of financial services, assisting the development of efficient, viable financial institutions and products and investing in the social and economic infrastructure to improve financial management skills and business development in rural areas. Additionally, establishing a sound economic base whereby the very poor can access financial services is a priority for many donors.
USAID's investments in financial services emphasize asset accumulation and protection for the poor (client level), building client-responsive, sustainable institutions (institution level), and helping microfinance providers exit from donor support (market level). Client-level investments aim at deepening access to financial services for populations that are marginalized and underserved due to their socioeconomic status, gender, age, religion, culture, ethnicity, location, or the impact of conflict or disaster. Investments aimed at the retail level continue to underscore microfinance institutions’ sustainability, but also their commitment to deliver products and services that meet the diverse needs of the poor. Market-level investments encourage microfinance institutions to transition from donor to commercial sources of capital and to develop productive partnerships with private sector institutions. The goal of these investments is to provide practitioners and USAID missions with technical information on how to design and implement a balanced mix of interventions to foster financial sectors that include, and address the needs of, poor people.
