Topics
Last year, we argued that financial inclusion was entering a new era. We suggested that the sector’s future would be shaped less by incremental gains in access and more by its intersection with adjacent development agendas, and by a shift toward outcomes such as financial health, resilience, and economic participation. The past twelve months have made that transition clearer and faster than expected.
Two structural shifts defined this acceleration.
The first was a signal of maturity in the sector’s core achievements and a hint that the underlying architecture of inclusion is shifting. The Global Findex 2025 delivered something close to a graduation moment, with four in five adults worldwide now holding an account and with historic gains in gender equality and digital adoption. Less noticed, but even more revealing, was the structure of the report itself. For the first time, Findex opened not with access to finance but with mobile ownership, a departure from every previous edition and a recognition that technology access and other enabling conditions are now integral to the inclusive finance agenda.
The second shift is more abrupt and less anticipated: a dramatic reordering of the funding landscape that has sustained the sector for two decades. Three developments defined the funding environment in 2025 and together signaled a structural change in the sector. USAID effectively came to an end. Bilateral donors including Germany, France, the Netherlands, and others sharply reduced their commitments. The Gates Foundation plans to sunset its Inclusive Financial Systems team by 2030. Each of these shifts would have been significant on its own. Their convergence marks a turning point in how financial inclusion will be financed and governed in the years ahead.
The central question is how the sector will evolve in response.
What began as a microcredit movement driven by community-based organizations and NGOs providing small loans to women’s groups has grown into a vibrant ecosystem that includes development and financial sector organizations; fintech and technology firms; impact investors; multilaterals, bilateral, and private donors; development advisors; and policymakers. It has been one of the few areas of international development characterized by sustained dynamism and collaboration, producing both important breakthroughs and significant mistakes along the way. Donor funding supported this system, although unevenly, and the effects of the current disruption will vary across actors. Yet the ecosystem as a whole, which relied on donor support both to advance inclusive innovation and to protect consumers from downside risks, now faces a funding shock that will reshape its capabilities, incentives, and long-term trajectory.
Reconfigurations Underway in the Financial Inclusion Support Ecosystem
The funding contraction is forcing a clearer sorting of institutional models within the financial inclusion support ecosystem. These are the organizations that sit behind the market, providing the research, advisory work, policy design, capacity building, and market intelligence that enable financial service providers, regulators, and policymakers to function effectively. Rather than converging on a single structure, these support institutions are beginning to cluster around a number of viable archetypes, each shaped by different incentives, funding sources, and accountability mechanisms.
One model is the investor-embedded institution, where financial inclusion work is integrated with investment capabilities and where investment capital is likely to play a more central role over time. Accion represents a mature example, combining research, advisory functions, and innovation work with investment platforms that support early-stage and growth-stage companies. Other organizations have moved in this direction through their own investment vehicles, including initiatives such as Bankable Frontiers Associates’ Catalyst Fund and FSD Africa Investments. In this model, development work and market-building functions increasingly coexist alongside investment strategies aimed at creating commercially viable solutions while shaping inclusive markets. Financial sustainability will be expected to rely more heavily on investment activity, while development capabilities help guide where capital can deliver both commercial and social returns.
A second model is the public mandate institution, where financial inclusion functions sit within, or closely alongside, government structures. Colombia’s Banca de las Oportunidades exemplifies this approach. It is a public policy program of the Colombian national government, focused on expanding financial inclusion through a network of financial institutions, and administered by a state-owned development bank rather than an independent nonprofit. A related model is the RBI Innovation Hub in India, a separate corporate entity fully owned by the Reserve Bank of India. Although distinct from a government department, it operates as a government-sector subsidiary with a public mandate to drive financial innovation and inclusion. These structures anchor financial inclusion within public institutions whose incentives align with long-term policy objectives rather than short funding cycles.
A third model is the consulting and advisory organization, which becomes more viable as the ecosystem matures. With a diverse range of financial service providers, platforms, and regulators now seeking specialized expertise, organizations that have historically relied on grants may evolve toward a blend of donor-funded projects and commercial contracts. These contracts increasingly come from industry actors aiming to expand their reach among lower-income segments or navigate new regulatory or technological shifts. Microsave anticipated this transition early, repositioning itself as a consulting firm capable of sustaining deep technical work while remaining embedded in the sector’s applied practice.
Alongside the three main archetypes, new hybrid modes are emerging, evolving in ways that are difficult to predict as organizations adapt to shifting incentives and constraints. These models are still taking shape and will likely involve combinations that were less visible in earlier phases of the sector, including university research centers that anchor market diagnostics, impact research and policy experimentation; R&D units within corporates experimenting with inclusive design, and mission-oriented startups developing tools that address gaps left by both public and commercial actors. Advances in AI are accelerating this evolution by lowering the cost of experimentation, enabling new forms of data-driven insight, and creating opportunities for institutions with very different mandates to collaborate. What emerges is unlikely to fit neatly within past categories, but these hybrid structures may become an important part of how the sector innovates under tighter resource constraints.
What is emerging is a more distributed and embedded architecture of financial inclusion support. Large-scale organizations that are fully donor-funded are becoming less likely to carry system-wide functions on their own as funding constraints tighten. Instead, core support functions are likely to be increasingly embedded within a broader institutional landscape, with different actors holding responsibility for different elements of the market-building agenda. Public–private stewardship arrangements are becoming particularly important for long-term data and market infrastructure. Kenya’s FinAccess surveys and South Africa’s FinScope illustrate how functions that began as donor-funded initiatives can transition into durable structures financed by public institutions and regulated market actors. As traditional funding contracts shrink, these collaborative arrangements are playing a larger role in sustaining essential system-wide capabilities.
What May Be Left Behind
The graduation moment invites reflection because what the sector has graduated into remains unclear. Gains in access and digital usage are real, but they expose deeper questions about whether the foundations for financial health, resilience, and economic mobility are in place. As new institutional models take shape and incentives shift, there is a risk that critical agendas fall to the margins. The work closest to the last mile, and the long tail of small and mid-sized markets with limited commercial appeal, may struggle to attract sustained attention. Consumer protection, market-conduct oversight, and the management of downside risks will remain priorities for policymakers, yet the learning loops, demonstration models, and spillovers made possible in the development community will be harder to maintain.
Even as the contraction in funding may bring losses of talent, institutional memory, and the dynamism that once fueled rapid experimentation, it also creates space for a more intentional and durable phase of sector building. These risks are significant and will shape how the sector evolves. Yet the maturity of today’s infrastructure, the stronger connections across public and private actors, and the growing recognition of financial health and resilience as policy priorities offer a basis for optimism. If the sector is deliberate about what it protects and intentional about where it innovates, the next phase of financial inclusion can be more focused, more resilient, and ultimately more impactful than the one that came before.
Photo credit: Vinh HN
Authors
Explore More
