This report is the fourth in a series of annual reports produced by the United Nations Capital Development Fund (UNCDF). It presents learning and reflection on progress against the financial inclusion indicators included in the 2020 and 2021 reports, along with the introduction of new indicators for 2022. In 2020, following the development of a guidance note by the Working Committee on Financial Inclusion (WC-FINC) Desired Outcome (DO) 1 Working Group, the Working Group identified that the Association of Southeast Asian Nations (ASEAN) requires a regional monitoring and measurement system with standardized indicators for financial inclusion. As a result, WC-FINC developed a regional frame work and report in close partnership with UNCDF and in collaboration with the ASEAN Member States (AMS) during an iterative process of engagement and feedback. In 2021, UNCDF provided support in the drafting of a follow-on report to assess the progress made by AMS towards the financial inclusion targets and indicators agreed, particularly those added for the 2021 report around inclusive growth. The reporting framework used for this series enabled an assessment of market progress and the effectiveness of the implementation of the National Financial Inclusion Strategies (NFISs) to achieve the desired outcome.
In 2022, WC-FINC and UNCDF hosted various meetings and workshops to develop new financial capability indicators with AMS using a staged approach of pre-formulation, formulation, and implementation. These meetings helped AMS identify their current stages of financial capability, review examples and databases of financial capability indicators based on global best practices and share challenges and opportunities with other AMS as they relate to advancing the financial capabilities of the region’s citizens.
In 2023, AMS identified MSME finance as a key priority during the 15th meeting of ASEAN WC-FINC held in Bali, Indonesia in February 2023. This aligns with one of the key milestones of the ASEAN Blueprint 2025, which aims to “promote financial inclusion to deliver financial products and services to a wider community that is underserved, including MSMEs” and to “enhance financing ecosystems in the region to benefit MSMEs, including through cross-collaboration among various working groups in ASEAN”. It also aligns with the ASEAN Strategic Action Plan for SME Development (2016–2025), which aims to “create globally competitive, resilient, and innovative SMEs who are integrated into the ASEAN community and inclusive development in the region” by 2025. One of the four key pillars of this action plan includes increasing access to finance for MSMEs. WC-FINC and UNCDF followed this same co-creation process with AMS to identify new MSME indicators and corresponding categories for this current report.
Full Document here