Over the last ten years, catalytic capital — investment capital that is patient, risk-tolerant, concessionary, and adaptable — has played an increasingly important role in filling the gaps left by the rapidly expanding and diversifying field of impact investing and serves to attract more conventional investors to sectors with high development potential. While we do not know the volume of catalytic capital investments in inclusive finance, we know that investments in inclusive finance continue to be a top category of growth.

This report focuses on the role of catalytic capital in the digital credit industry and highlights the limitations of a framework that does not consider broader market-level consequences of such investments. The rapid growth of digital credit has resulted in an influx of investment but also created significant concerns over consumer protection, and the supervisory capacity of local regulators has failed to keep pace with the risks. The report draws lessons from how digital credit markets have evolved and highlights guardrails needed at the market level to ensure that growth is responsible, impactful, and leads to inclusive market development.


Authors

Jayshree Venkatesan

Senior Director, Consumer Protection & Strategic Industry Engagement

As Senior Director, Consumer Protection & Strategic Industry Engagement, Jayshree leads the development and execution of the consumer protection research and influence strategy, contributing to CFI’s global portfolio. She also oversees the Responsible Finance Forum’s convening and influence model, building a community dedicated to addressing industry challenges in consumer protection and advancing the responsible finance agenda. 

With two decades of experience spanning structured finance, innovative business models, consumer research, and policy influence, Jayshree has worked to advance financial inclusion and economic development globally. Before joining CFI, she spent nearly a decade as an independent consultant with institutions like CGAP, the World Bank, JICA, and ITAD, focusing on customer-centric business models and challenges faced by low-income consumers in accessing and using formal financial services. From 2009-2013, she was part of the founding team at IFMR (now Dvara Trust) in India where she led India’s first mezzanine fund for microfinance, which evolved into an alternate investment fund. Jayshree is also a senior policy fellow at the Leir Institute within the Fletcher School of Law and Diplomacy and has served as adjunct faculty at the Fletcher School of Law and Diplomacy, teaching decision analysis for business. 

Jayshree is a recipient of the Chevening fellowship for leadership from the Foreign and Commonwealth Office, UK and completed the program at Kings College, London. She earned an MA in international relations from the Fletcher School of Law and Diplomacy, an MBA from Management Development Institute in Gurgaon, and an undergraduate degree in mathematics from Mumbai University. 

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