A resilient, diverse and inclusive financial sector is needed to support broader economic growth, to finance the real economy including firms and infrastructure, and to better serve women and the poor, thus contributing to sustainable prosperity. Efficient and effective regulatory and supervisory regimes that balance risk and innovation as well as deep, broad and integer financial markets, provide the framework conditions for a functioning financial system. The global economic shock caused by the Covid-19 pandemic once more underlined the importance of resilient financial systems.

The high-level outcomes are deep, inclusive, efficient and resilient financial systems. A resilient, diverse and inclusive financial sector is needed to support broader economic growth, to finance the real economy including firms and infrastructure, and to better serve women and the poor, thus improving the welfare of the population. Finance conveys both a strong cross sector and cross border nature, along with opportunities and risks to be managed, for countries to succeed in their developmental strategy while addressing global challenges.

Outcome 1: Safe and sound financial systems and effective risk management

Outcome 2: Suitable, safe, sustainable, and affordable financial services for individuals

Outcome 3: Reduced financing gaps and broader coverage for business

Outcome 4: More developed and competitive financial markets and increased private sector leverage

Cross-cutting themes: climate change and sustainable finance- digital financial services- financial solutions for gender gaps

Expected results:  

At the country level: Financial Sector Diagnostics, Technical Assistance, Policy Advice, Capacity and Institution Building.

At the global level: Knowledge creation and dissemination, including work with standard bodies.

Results from previous phases:  

The Finance for Development Trust Fund will built on results and lesson learnt from the Financial Sector Reform and Strengthening Initiative (FIRST). Created in 2002, following the East Asian financial crisis, FIRST has stood out as a catalyst for broader reforms by delivering targeted, gap-filling technical assistance projects. During its 20 years of operation, FIRST has funded over 806 projects in 120 countries around the globe, deploying over US$191.3 million in supporting tailored technical assistance projects to strengthen financial sector stability, build inclusive financial systems, and deepen financial markets. FIRST projects have catalysed over US$1.8 billion of additional funding from other sources to implement successive reforms.