UNCDF is the UN’s capital investment agency for the world’s least developed countries (LDCs). It creates new opportunities for poor people and their communities by increasing access to inclusive finance and investment capital. UNCDF focuses on Africa and the poorest countries of Asia and the Pacific, with a special commitment to countries emerging from conflict or crisis. It can provide seed capital both grants and loans as well as technical support that will improve poor peoples’ lives. UNCDF works to enlarge peoples’ choices: it believes that poor people and communities should take decisions about their own development. UNCDF works in challenging environments – remote rural areas, countries emerging from conflict – and paves the way for others to follow. Its programmes are designed to catalyze larger investment flows from the private sector, development partners and national governments, for significant impact on the SDGs. Established by the General Assembly in 1966 and with headquarters in New York, UNCDF is an autonomous UN organization affiliated with UNDP. The UN Capital Development Fund makes public and private finance work for the poor in the world’s 46 least developed countries (LDCs). UNCDF offers “last mile” finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development. UNCDF pursues innovative financing solutions through: (1) financial inclusion, which expands the opportunities for individuals, households, and small and medium-sized enterprises to participate in the local economy, while also providing differentiated products for women and men so they can climb out of poverty and manage their financial lives; (2) local development finance, which shows how fiscal decentralization, innovative municipal finance, and structured project finance can drive public and private funding that underpins local economic expansion, women’s economic empowerment, climate adaptation, and sustainable development; and (3) a least developed countries investment platform that deploys a tailored set of financial instruments to a growing pipeline of impactful projects in the “missing middle”. Since 2008, UNCDF has been supporting digital finance with significant success which has led UNCDF to make digital finance the largest part of its inclusive finance portfolio. UNCDF is also to host the Secretariat of the Better than Cash Alliance (BTCA), a partnership of governments, companies, and international organizations that accelerates the transition from cash to digital payments in order to reduce poverty and drive inclusive growth. UNCDF also serves as the secretariat for the UN Secretary- General’s Task Force on Digital Financing of the SDGs, which will consider the next wave of digitalization of finance and how the systemic changes to the financial ecosystem due to digital technologies will impact financing for the SDGs. For several years UNCDF’s work in digital finance has led it to support new digital solutions linked to finance, to further drive financial inclusion and to achieve the SDGs. This includes projects linked to on an off-grid energy, agriculture, employment, health and transport. Based on over a decade of experience applying a market development approach in digital finance in Africa, Asia and the Pacific, UNCDF started in 2017 to expand the scope of its programmatic agenda to go beyond digital finance. Through the “Leaving no-one behind in the digital era” strategy, UNCDF shifts from focusing only on digital finance to the development of inclusive digital economies. The strategy recognizes that reaching the full potential of digital financial inclusion in support of the SDGs aligns with the vision of promoting digital economies. The UNCDF digital agenda for migration and remittances falls within the organization’s broader global strategy, set forth in 2019, of “Leaving No One Behind in the Digital Era.” This vision is to empower millions of people by 2024 to use services daily that leverage innovation and technology and contribute to the Sustainable Development Goals. Through a market development approach, UNCDF continuously seeks to address underlying market dysfunctions. The Programme contributes to, and benefits from, this overarching corporate mandate. The Programme is administered by UNCDF with funding from the Swiss Agency for Development and Cooperation, or SDC, and Sida, the Swedish International Development Agency. The UN General Assembly adopted the 2030 Agenda for Sustainable Development in September 2015. The 2030 Agenda recognizes migration as a core-development consideration, marking the first time that migration is explicitly integrated into the global development agenda. It also recognizes a major relevance of international migration as a multidimensional reality of and for the development of countries of origin, as well as transit and destination, which requires coherent and comprehensive responses. Migrants, an estimated 281 million people, the estimated four percent of the global population who live and work outside their home countries, are among those most at risk of being left behind. They may fall outside of, or lack practical access to, the legal and social safety-net protections in both their host countries and home countries, and those without formal identification documentation face heightened financial vulnerability. Their economic activity is vitally important, however, and the remittances they send home could be a major driver of sustainable development. Remittances — the money sent back home to loved ones by migrant breadwinners living abroad — are a significant share of the total income flowing into many developing countries and a vital income stream for many households. Remittances also contribute to reaching the SDGs in a variety of ways: 1) Household level: by recognizing the positive socioeconomic impact of remittances on families and communities; 2) Community level: Benefits associated at sub-national or municipal levels including reduced rural poverty, lower income inequality, increased micro small and medium enterprises (MSME) activity, and strengthen resilience to adverse effects of climate change or disaster risks; 3) Government level: Benefits for public sector institutions including greater transparency, better communication with citizens, and increased private sector development and entrepreneurship as a result of access to capital and domestic credit; 4) Macro level: At macro-economic level, remittances can foster much needed foreign currency exchange, stabilize Balance of Payments (BOP), reduce dependency on government aid, and re- allocate capital resources into more productive investments and other financial services – moving money from international to domestic, consumption to investment, and from urban to rural. As new technologies have emerged in recent decades, a disconnect has grown between the remittance services on the market, the policies that govern them, and the needs and behaviors of migrant populations, which has resulted in limited adoption of digital remittance channels. The opportunity to transition migrants from cash to digital methods for sending money home that are safer, more affordable and more easily tracked, remains largely unrealized, with the COVID-19 pandemic providing potential avenues for improvement. UNCDF’s Migration and Remittances for Development Programme, or the Programme, aims at contributing to sustainable development by making remittances more accessible and affordable, while helping build resilience for migrants and their families. For both sending and receiving countries, the Programme seeks to increase the share of migrant remittances flowing through formal channels, thereby giving policymakers at both ends greater visibility into the true picture of inbound and outbound financial flows. For remittances service providers, the Programme seeks to build the capacity to understand the financial needs and preferences of migrants and their families, and to design and deliver responsive products accordingly. For migrants themselves, the Programme aims not only to lower the costs and increase the safety and convenience of sending money, but also to link remittances to a broader suite of financial services—including insurance, savings, pensions, investments, and credit—that can help them reach their goals. The Programme recognizes digitization as the key to achieving these objectives.
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