Financial sector stability and capital market development.
A properly functioning and stable financial system is crucial to solid economic development. Equally, a stable regulatory framework is essential to ensure the proper allocation and agglomeration of capital.
In
many developing countries, people in need have no access to financial
services of the kind they need. However, it is possible to improve this
situation through holistic support for the finance sector. This involves
advising central banks on how to create an enabling environment for a
properly functioning microfinance sector; setting up credit reference
agencies to provide greater transparency; and helping microfinance
associations make effective use of standardised tools to monitor and
rate microfinance institutions.
Insurance
Insurance
plays an important role in alleviating the financial impacts of
tragedies such as illness or extreme weather for people with low
incomes, and is a sustainable means of preventing such events from
triggering a slide into poverty.