USAID’s vision for digital finance is to advance resilience, well-being, empowerment, and equity for underserved communities by fostering the development of open, inclusive, and secure digital finance ecosystems and economies worldwide.
Digital financial services — financial services enabled by or delivered through digital technology — are having a transformative effect on the financial sector and digital economies across developing countries and emerging markets. Across much of the world, the last two decades have seen the emergence of new business models and services in finance. These have ridden the wave of the mobile — and later, Internet — revolution.
In many countries, the evolution of finance has led to better and cheaper access to services as well as to new products such as safer formal savings, and new types of credit. This has helped individuals, households, and firms improve resilience, pursue economic opportunities, and support their livelihoods. Yet in just as many countries, this evolution has introduced new risks or magnified pre-existing forms of inequality. Gender divides in financial inclusion persist. Cases of cyber attacks, online fraud, loss of funds, over-indebtedness, irresponsible data practices, algorithmic bias, and abusive debt collection practices are common across many countries where USAID works.
Given this reality, USAID’s Digital Finance team’s portfolio aims to support Agency programming and influence the broader development community to ensure that as digital finance ecosystems grow, they do so in a manner that realizes potential benefits while also addressing and mitigating against potential harms.
Digital Financial Services (DFS) (also called “financial technology,” or FinTech) are financial services enabled by or delivered through digital technology (e.g., mobile phones, cards, the internet). These services (e.g., payments, credit, insurance, savings, advisory) can be offered by a range of providers, from banks to a host of non-bank financial institutions, such as microfinance institutions, digital credit providers, payment providers, FinTech companies, and electronic money issuers.
USAID’s Digital Finance practice works to overcome barriers preventing access to and usage of these vital services by partnering with governments, watchdog groups, universities, donors, the private sector, and underserved communities around the world to support financial systems and policies that increase transparency, open new and inclusive markets, and address our most pressing humanitarian and development challenges.
To advance its vision, the Digital Finance team: (a) manages strategic initiatives to spotlight issues, catalyze collection action, demonstrate programmatic approaches, or support experimentation; (b) provides advisory support and capacity-building to Agency staff and partners; (c) engages in thought leadership, research, and convening with a range of stakeholders; and (d) coordinates and collaborates with other U.S. Government counterparts.
Our Team-Level Strategic Initiatives and Partnerships
Across its global portfolio, USAID has invested significant resources in the development of inclusive financial sectors and open, inclusive, and secure digital ecosystems. Over the last two decades, many USAID Missions and country-level activities have contributed to better outcomes for partner-country communities. Those activities are exemplified by past efforts like USAID/Colombia’s Rural Finance Initiative, USAID/Philippines’ E-Peso Activity, and USAID/Nepal’s support for UNCDF’s Mobile Money for the Poor program.
The strategic initiatives below reflect the evolving set of issues that the Digital Finance team highlights in order to inform other Agency programs or generate insights that would be useful for the broader development and humanitarian assistance communities.
Cross-Cutting or Ecosystem-Wide Initiatives
The Women in the Digital Economy Fund (Wi-DEF) is a joint effort between USAID and the Bill & Melinda Gates Foundation to accelerate progress on closing the gender digital divide. USAID will commit up to $50 million in Gender Equity and Equality Action (GEEA) fund resources, subject to the availability of funds, and the Gates Foundation will commit $10 million by the end of 2026, with at least half of each of these commitments focused on Africa. In addition to its commitment to Wi-DEF, the Gates Foundation has committed to invest $40 million toward closing the digital gender divide in Africa and South Asia. Wi-DEF will accelerate progress to close the gender digital divide by scaling evidence-based, proven solutions, including women-led solutions that improve women’s livelihoods, economic security, and resilience. This work will focus on programs that support digital access and affordability; the design and development, especially women-led development, of relevant products and tools; digital literacy and skills training; online safety and security; and sex-disaggregated data and research.
CGAP is a global partnership of more than 30 leading development organizations that works to advance the lives of poor people, especially women, through financial inclusion. CGAP, through its rigorous commitment to evidence and outcomes, is a leading source of guidance and insight for the development community and partner-country stakeholders. USAID has supported CGAP, which is housed at the World Bank for years, and USAID also played a role in founding CGAP in the mid-1990s.
Better Than Cash Alliance (BTCA)
BTCA is a partnership of 80 governments, companies, and international organizations that have committed to accelerating the transition from cash to responsible digital payments to help achieve the Sustainable Development Goals. USAID co-founded BTCA in 2012 and has continued to be a co-funder since then. Housed at the UN Capital Development Fund, BTCA works by providing advisory services on digital financial services, based on members’ priorities, commissioning and sharing research on responsible digital economy practices, and conducting digital payments policy advocacy at national, regional and global level.
The Smart Communities Coalition (SCC) is a public-private effort seeking to transform the operating model in humanitarian contexts. Co-chaired by Mastercard and USAID, the SCC organizes and mobilizes stakeholders according to their core strengths to address three fundamental pillars – energy, connectivity, and digital tools. We seek to enable innovative, sustainable approaches to the delivery of basic services, creating hope and economic opportunity for the forcibly displaced and the communities that host them.
Strengthening Enabling Environments, Safeguards, and Effective Policy Advocacy
Trust and Competition in Digital Economies (U.S. Federal Trade Commission)
Launched in September 2022, the Trust and Competition in Digital Economies initiative harnesses the FTC's technical expertise, capacity-building programs, convening power, and relationships across the region to help authorities adopt and implement policy, legal, regulatory, and enforcement frameworks that protect consumers and competition. This initiative also involves collaboration with the DOJ Antitrust Division
R2A was an alliance co-founded by USAID, the Bill and Melinda Gates Foundation (BMGF), and the Omidyar Network to improve awareness and understanding of how financial authorities could deploy regulatory technology (“RegTech”) to advance key priorities like financial consumer protection and financial integrity. R2A worked with financial authorities in the Philippines and Mexico prototype competitively selected RegTech applications that addressed a shortlist of priority pain points: a lack of data-validation tools for quarterly reporting data, a lack of any meaningful mechanism for ensure customer complaints were resolved, and an inability to fully analyze suspicious activity reports flagging potential instances of money-laundering. R2A held 3 challenges, which led to 31 proposals from 31 companies across 13 countries. By the end of its first phase, 49 regulators from 29 markets had reached out to R2A with an interest in pursuing similar engagements within their jurisdictions.The winning prototypes also showed promising initial results.The financial authority focused on anti-money laundering (AML) estimated that the RegTech prototype might reduce the length of on-site AML inspections from 3-5 weeks to 3-5 days.
The Toronto Centre is a leading capacity-building organization for central banks and financial sector supervisory authorities. With support from USAID, the Toronto Centre launched an activity to elevate awareness and understanding of the role that SDD can play in advancing long-standing financial sector goals of stability, integrity, inclusion, and protection. In the first phase of engagement, the Toronto Centre engaged in a series of focus-group discussions and country-level surveys and analyses in Kenya, Zambia, Colombia, and Peru. Based on the findings from the first phase of engagements, the Toronto Centre then developed a Gender-Aware Supervision Toolkit that could be deployed by authorities in a modular fashion based on what aspects are relevant to a particular authority or given a local market’s stage of digital readiness. The toolkit has since been integrated into Toronto Centre trainings and piloted with additional authorities by other development organizations.
Mobilizing Inclusive Capital
Digital Invest is a blended finance program that seeks to mobilize private capital for digital connectivity infrastructure and digital financial services that strengthen open, interoperable, reliable, inclusive, and secure digital ecosystems in emerging markets. Digital Invest supports global investment fund managers, project developers, and other private sector partners seeking to accelerate sustainable market growth for internet service providers (ISPs) and financial technology companies (fintechs) that reduce the digital divide by serving traditionally excluded communities in developing markets.
Start Path Empodera is a business accelerator for women-led technology ventures across Colombia, Peru, and Ecuador, with a focus on digital inclusion, digital finance, and digital commerce. Co-led by USAID and Mastercard, the program has supported forty companies across four cohorts.
Facilitating Infrastructure Build-out, Responsible Product development, and Equitable Market Conduct
Digital Payments Initiative
The Digital Payments Initiative was launched in coordination with USAID’s first-ever Digital Strategy to build the capacity of USAID staff and the broader development community, particularly implementing partners, to identify and execute on opportunities to:
help develop open, inclusive and secure host country digital payment ecosystems; and
integrate digital payments across all USAID programming where appropriate.
The initiative resulted in a number of new or updated program design aids, such as the 2020 Digital Payments Toolkit.
Digital Financial Services in Rwanda
In 2021, the USAID Digital Finance team and the University of California Berkeley with Mount Kenya University Rwanda released the research report, "Exploring the Use of Mobile Money Services among Tea SACCOs in Rwanda: Challenges and Opportunities." This project explored the social impact of mobile money services among tea Savings and Credit Co-operatives (SACCOs) members in Rwanda, following the implementation of a payment automation project funded by Access to Finance Rwanda (AFR). The research explores the opportunities and challenges that emerged from this automation as well as potential spillovers of transitioning agricultural cooperatives to a mobile money payment system. The report includes key research findings and recommendations which are also in this short policy brief.
Improve Individual and Firm-Level Agency and Skills, and Address Discriminatory Social Norms
This is an action-oriented initiative to drive behavior change in the financial inclusion sector to promote women’s digital and financial inclusion. The overarching goal of this activity is for financial service providers to recruit, hire, promote and retain more women across their entire employment life cycle in order to achieve a more gender-balanced workforce across the entire industry that is positioned to influence the design, dissemination, and delivery of financial products and services that advance women’s financial inclusion.
Mastercard and USAID partnered to launch Project Kirana, a business development and digital financial literacy accelerator program for women micro-entrepreneurs in India. In January 2023, Project Kirana finished providing training to 2,500 women kirana entrepreneurs operating small retail businesses in Lucknow and Kanpur, which have a high concentration of women-owned and operated kiranas (small, neighborhood convenience stores). Project Kirana supported participating women entrepreneurs by providing them with the tools, resources, and knowledge to successfully own and manage small retail businesses, access financial and digital payment services, and strengthen their own agency in making household and business decisions.
The open-source digital financial capabilities campaign called “Hey Sister! Show Me the Mobile Money!” has 25 dramatized, soap-opera style, audio lessons that cover a range of topics such as basic mobile money transactions, privacy, scam prevention, savings and loans, insurance, and budgeting. Since lessons are delivered through voice recordings, illiterate women are able to access and use the content. The lessons are intentionally designed to be three to four minutes in length to make them accessible to women, who are often time poor. The lessons are available in 17 different languages, along with training facilitation materials for organizations that wish to adopt the lessons for in-person activities that support women’s economic empowerment. Hey Sister has reached around 1 million users both directly and indirectly, with a majority of them being women. The curriculum is used by organizations such as MTN Ghana, World Food Programme, and Pro Mujer. (See Replication Guide.)
Adapted from USAID and Mastercard’s “Project Kirana for Women” curriculum for women-owned-and-operated micro-enterprises in India, this training is designed to build capacity for women micro-entrepreneurs to own and manage their business operations. All eight modules are available in PowerPoint in English, French, Swahili, and Spanish. The training content is customizable to allow for adaptation to meet the goals of any organization seeking to build the business, financial, and digital capabilities of women micro-entrepreneurs.
FinTech Partnerships Playbook: How Donors Can Pursue PSE to Strengthen Digital Finance Ecosystems — This playbook is meant to equip USAID staff and implementing partners to develop and pursue responsible private sector engagement (PSE). The playbook enables brainstorming during program design and PSE by offering a set of common objectives for PSE in FinTech, a set of illustrative PSE plays, and a set of concrete examples of each play in action.
FinTech Partnerships Checklist: Identifying and Strengthening the Right Digital Finance Partner — This 2-page checklist offers a set of structured questions to shed light on a provider’s (or product’s) ability to engender trust in and help grow the digital finance ecosystem.
How to Promote Fair Competition in the Digital Economy — This publication will provide practical information for USAID staff and partners whose development programs are impacted by competition within the digital economy, including FinTech, e-commerce, data centers, digital agriculture, digital health, artificial intelligence, and other areas. This publication will share how fair competition enables—and sustains—digital economies that can then (a) create economic opportunity for small- and medium-size enterprises (SMEs), (b) offer useful, equitable services to end-users, and (c) strengthen respect for the rule of law in a given country. The publication will also offer concrete programmatic examples for how USAID and partners can stimulate fair competition either as a primary focus of a standalone activity or a component of a larger activity.
Examining Virtual Currencies: Risks and Uncertainties of a Novel Payment Technology in International Development — This brief offers a high-level primer on virtual currencies, illustrative scenarios for how the virtual currency landscape might evolve, and illustrative ways the development community might responsibly account for potential implications the space might present. The brief urges stakeholders to focus on credible evidence.
Blockchain Primer: How to Assess the Relevance of DLT to International Development — This primer helps the foreign assistance community assess whether and how distributed ledger technology (DLT) might implicate development or humanitarian assistance priorities. This primer provides: a set of key questions to consider for assessing relevance of DLT to particular development challenges and a basic summary of the technical aspects of DLT. The primer urges stakeholders to focus on credible evidence and good-practice digital development
Replication Guide: Digital Financial Capabilities Campaign — This replication guide shares how USAID worked with various stakeholders to develop and launch the open-source “Hey Sister! Show Me the Mobile Money” digital financial capabilities campaign. This Replication Guide shares an overview of a proven, evidence-based solution to a specific development challenge, and then provides steps on how to replicate it. The open-source program has 25 three-minute voice lessons that are offered in 14 African languages plus English, French and Spanish and can be accessible through any mobile device for women who often find themselves with limited time and mobility.
Replication Guide: Strengthening Digital Finance and Mobile Money Agent Networks — This replication guide shares how USAID developed a technical assistance and capacity-building program in Liberia and Sierra Leone to improve the sustainability and reliability of agent networks that provided payment and other services to rural communities affected by the Ebola Crisis. This guide focuses specifically on USAID support to one of the mobile money providers in Liberia, and it examines several potentially replicable aspects of the activity.
Building Resilient and Inclusive Digital Ecosystems: A Toolkit for Using Digital Payments in Development Programs — The Toolkit is designed to be used by organizations regardless of their experience with digital payments and to inspire and enable organizations new to digital payments to make the switch. The Toolkit is a “how-to” guide divided into step-by-step modules along with associated tools to support organizations in practically applying the knowledge learned.
Digital Finance in USAID's Agriculture and Food Security Programming - This briefing note provides an overview of emerging digital financial services operating models and delivery channels and their relevance to programming supported by USAID’s Bureau for Resilience and Food Security (RFS).
Other selected publications by USAID implementing partners
Mission Critical: Enabling Digital Payments for Development — This brief offers USAID Mission staff and implementing partners concrete examples of how digital payments can implicate development priorities across many sectors and what types of programs Missions can pursue to use digital payments to advance their target outcomes.
Role of Digital Financial Services in Accelerating USAID's Health Goals — This brief is intended for global health practitioners and implementing partners and discusses how digital finance, under the right circumstances, can catalyze health results by supporting USAID’s Health Systems Strengthening (HSS) core functions and strategic outcomes. This brief also shows how improved financial well-being, enabled partly by digital financial services, can be a critical source of resilience for households and communities against financial shocks and catastrophic expenditures.