Financial Sector Deepening Africa (FSD Africa)
Created in 2012, FSD Africa is a £35 million financial sector development programme or ‘FSD’ based in Nairobi. It is funded by the UK Government’s Department for International Development (DFID). FSD Africa aims to reduce poverty across sub-Saharan Africa by building financial markets that are efficient, robust and inclusive.
FSD Africa is a market facilitator or catalyst. It applies a combination of resources, expertise and research to address financial market failures and deliver a lasting impact. FSD Africa has a mandate to work across sub-Saharan Africa on issues that relate to both ‘financial inclusion’ and ‘finance for growth.’
FSD Africa is also a regional platform. It fosters collaboration, best practice transfer, economies of scale and coherence between development agencies, donors, financial institutions, practitioners and government entities with a role in financial market development in sub-Saharan Africa. In particular, FSD Africa provides strategic and operational support to the FSD Network.
FSD Africa has three main areas of work:
Finance for all: Interventions designed to increase access to finance to empower and reduce the vulnerability of the poor.
Finance for growth: Interventions designed to provide capital to investment-ready sectors to drive inclusive economic growth and reduce poverty through increased prosperity.
Regional platform: Interventions designed to foster collaboration, best practice sharing and harmonisation between the FSD Network and other partners to improve effectiveness and achieve value for money.
FSD Africa’s Strategy
To provide focus and to deliver on these areas, FSD Africa’s Strategic Plan (2013-2018) structures work into four pillars.
Pillar 1: Skills development and training. Interventions to increase skills, capacity and performance of financial institutions, financial sector professionals and the local services markets that support them across Africa.
Pillar 2: Growth and Investment. Interventions designed to build financial markets that more efficiently mobilise and allocate capital to businesses and projects that drive inclusive economic growth.
Pillar 3: Inclusive programmes. Targeted, market-building interventions in five priority areas (including agriculture finance, digital payments, savings groups, housing finance and credit markets) and launched and scaled regionally.
Pillar 4: Regional platform. Products and services to build and transfer skills and knowledge across countries and between financial sector development partners, especially the FSD Network.
How They Work
FSD Africa is a market facilitator. It aims to create lasting, positive change by making financial markets work better for the poor. It applies finance, expertise and research through projects and in partnership to address key financial market failures.
FSD Africa finance takes the form of a range of financial instruments such as grants, loans, equity and guarantees.
FSD Africa expertise takes the form of ‘know what’ such as specialist technical assistance and capacity building, or ‘know who’ such as new alliances or connections.
FSD Africa research takes the form of new learning or insights such as market intelligence, cross-border studies and policy analysis.