F4D Themes
F4D’s cross-cutting themes reflect broader developmental trends that carry deep and irreversible impacts on the evolution of financial systems.
All F4D active grants incorporate at least one cross-cutting theme in their scope.
Financing Solutions to Close Gender Gaps
Systematically including gender considerations and responding to women’s financial needs within program implementation is indispensable to support the World Bank’s Gender Strategy.
F4D activities aim to incorporate gender-sensitive components to projects where possible, both by incorporating gender-sensitive analysis in the design of projects and by adding sex-disaggregated indicators throughout. While systematic efforts will be made to mainstream gender across all F4D pillars, gender-sensitive activities are more closely related to Pillar 2 Financing the Poor and the Vulnerable and Pillar 3 Financing the Real Economy.
F4D’s financial inclusion program supports activities related to financial services for micro enterprises including projects focused on women’s financial inclusion, financial consumer protection, financial education, and financial capability activities directed to the needs of women as well as digitalization of remittances for women remittance receivers. Across Pillar 2, gender-related activities focus on:
Building foundational knowledge and data related to gender gaps in financial access and usage;
Providing project design and implementation guidance to operationalize gender-smart solutions through products such as National Inclusion Strategies, National Fintech/DFS Landscaping, and National Payment System Strategies.
For example, the Inclusive Digital Financial Services Reference Guide now includes a module on how Digital Finance Services (DFS) can address the gender gap in financial access. The Reference Guide, initially developed in 2019 and updated in 2022, is an online tool to assist regulators in exploring policy options to drive financial inclusion through DFS. As the field continues to advance, this guide will keep current with the latest topics, case studies, and the data/trends it presents.
In Mexico, jointly with IFC and CGAP, the World Bank teams will develop guidance and a toolkit for financial institutions to better serve women customers, with plans to evaluate their impact over time. A progress dashboard will also be developed to track the financial institutions’ adoption of the guidelines. To capture the customers’ perspectives, surveys will be conducted for women to gauge the value of services offered by the financial institutions.
Across Pillar 3, gender-sensitive activities include analysis of gender-related issues in key sectors such as MSME, housing and agriculture finance, formulating relevant policies to address them, and providing technical assistance to client governments on design and implementation of gender-smart interventions in those sectors.
Advancing Digitalization
The World Bank’s new vision emphasizes the critical importance of accelerating digitalization at scale to address global challenges.
DFS are central to the digitalization agenda, enabling the development of vibrant, inclusive, and safe digital economies. DFS lower costs, increase speed, security and transparency, and allow for more tailored financial services that serve the poor at scale. DFS address both supply-side issues (like high operating costs and limited competition) and demand-side challenges (such as unstable and low incomes, lack of trust and formality, and geographic barriers) that hinder access to financial services.
Currently 90 percent of the active F4D portfolio grants across all pillars embed digital technology in their scope. Notably, 100 percent of the grants under Pillar 2, Financing the Poor and Vulnerable, use digital technology to enhance the efficiency and effectiveness of financial systems for faster financial inclusion.
In Morocco, F4D is supporting the country’s efforts to position itself at the forefront of digitalization of the financial sector in the region, while addressing gender gaps. The Digital Finance for Morocco’s Economic Transformation and the Remittances and Payments projects aim to reduce the gender gaps and boost the use of electronic transactions, through targeted awareness-raising and training programs for women. Ongoing discussions are being held with the Central Bank of Morocco to expand the financial literacy activities in light of a new National Financial Inclusion Strategy.
In Madagascar, while the financial sector is growing, many people lack access to financial services. The World Bank team is supporting the development of fast payments capabilities and fostering uptake in digital transactions and acceptance of electronic payments in the merchants’ ecosystem based on the new national switch. In FY23, the first workshop on the operating rules of instant payments and capacity-building sessions on fast payments was delivered to the Central Bank of Madagascar.
Climate Change and Sustainable Finance
Strengthening the ability of people and countries to prevent, prepare, and recover from shocks, including against climate crises, is one of the critical elements of the World Bank’s vision and mission.
Climate change poses significant risks to the financial system, as acknowledged by central banks, regulators, and market participants. These risks come in two forms: physical risks and transition risks. Physical risks involve more frequent and severe natural disasters like droughts, hurricanes, and floods, as well as long-term changes such as rising sea-level and temperatures. Transition risks are related to the revaluation of assets due to climate policies (like carbon taxes), technological advances, and shifting consumer preferences, which may lead to assets losing value or becoming obsolete ("stranded"). These changes can increase credit, operational, and market risks for lenders, raise the risk exposure for insurers and reinsurers, and impact the investment portfolios of institutional investors.
F4D supports green and sustainable finance markets with the development of instruments (e.g., green bonds, green infrastructure investment, green mortgages, sustainable agriculture finance), environmental, social and governance integration by institutional investors, as well as green and sustainable finance roadmaps, taxonomies, and disclosure regulation. Country engagements often cover both the risk and opportunity dimensions, aimed at strengthening financial sector resilience and deepening of green markets.
Climate change and sustainable finance are key priorities in F4D’s agenda, with specific climate-related components embedded into the scope of select grants. At the global level, for example, teams are developing a toolkit to design more effective interventions aimed at expanding financing to SMEs for climate adaptation and mitigation. At country level, activities across Africa, Middle East and North Africa, and South Asia have embedded climate considerations in project design. Most of the technical assistance grants are designed to inform large-scale World Bank financing operations to accelerate efforts to reduce the impact of climate change.
In India, F4D supports the country’s commitment to promoting green and sustainable finance, mobilizing private capital for green investments, and addressing climate change challenges through innovative financial mechanisms. The team is providing technical assistance on the green finance agenda, including de-risking strategies, environmental, social, and governance lending, energy service company models, and dispute resolution, among others. Support was provided to the Ministry of Micro, Small & Medium Enterprises to define a green taxonomy for green projects, and F4D-funded research on energy service companies is informing the design of the Ministry’s MSME decarbonization plan.
In Madagascar, F4D promotes the creation of a green window in the partial portfolio credit guarantee scheme that was supported through the Financial Inclusion Project, a World Bank financing operation. The team is providing technical assistance to the Minister of Finance to create a green window that will cover a portion of the credit losses emanating from loans to MSMEs that are impacted by a climate shock and/or that undertake investments for climate adaptation. This technical assistance will support the preparation of a financing operation that will use this green window to channel emergency liquidity to MSMEs in case of a climate disaster, ensuring the preservation of jobs in affected areas. This activity also responds to some of the recommendations from the financial chapter of the Country Climate and Development Report for Madagascar, which was delivered with the support of F4D.